Hedge Funds Are Selling ITC Holdings Corp. (ITC)

Is ITC Holdings Corp. (NYSE:ITC) a good investment?

In the eyes of many of your peers, hedge funds are viewed as bloated, outdated investment tools of an era lost to time. Although there are In excess of 8,000 hedge funds in operation currently, this site aim at the leaders of this group, about 525 funds. It is assumed that this group has its hands on most of all hedge funds’ total capital, and by tracking their highest quality investments, we’ve unsheathed a few investment strategies that have historically outperformed the S&P 500. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we‘ve began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).

Just as useful, optimistic insider trading sentiment is a second way to analyze the marketplace. Obviously, there are lots of incentives for a corporate insider to get rid of shares of his or her company, but only one, very simple reason why they would buy. Plenty of empirical studies have demonstrated the market-beating potential of this tactic if shareholders understand what to do (learn more here).

Thus, we’re going to examine the newest info about ITC Holdings Corp. (NYSE:ITC).

What have hedge funds been doing with ITC Holdings Corp. (NYSE:ITC)?

At the end of the second quarter, a total of 9 of the hedge funds we track were long in this stock, a change of -36% from the previous quarter. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their holdings considerably.

Out of the hedge funds we follow, Adage Capital Management, managed by Phill Gross and Robert Atchinson, holds the largest position in ITC Holdings Corp. (NYSE:ITC). Adage Capital Management has a $125.1 million position in the stock, comprising 0.4% of its 13F portfolio. Sitting at the No. 2 spot is First Eagle Investment Management, managed by Matt McLennan, which held a $92.2 million position; 0.3% of its 13F portfolio is allocated to the stock. Some other peers that hold long positions include Clint Carlson’s Carlson Capital, D. E. Shaw’s D E Shaw and Chuck Royce’s Royce & Associates.

Due to the fact ITC Holdings Corp. (NYSE:ITC) has experienced dropping sentiment from the smart money’s best and brightest, logic holds that there were a few money managers who sold off their entire stakes heading into Q2. Intriguingly, Bill Miller’s Legg Mason Capital Management dropped the largest stake of the 450+ funds we track, worth close to $7.2 million in stock. Andrew R. Midler’s fund, Savitr Capital, also dumped its stock, about $2.7 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 5 funds heading into Q2.

What do corporate executives and insiders think about ITC Holdings Corp. (NYSE:ITC)?

Insider buying made by high-level executives is best served when the company we’re looking at has seen transactions within the past 180 days. Over the latest six-month time frame, ITC Holdings Corp. (NYSE:ITC) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll check out the relationship between both of these indicators in other stocks similar to ITC Holdings Corp. (NYSE:ITC). These stocks are Alliant Energy Corporation (NYSE:LNT), Brookfield Infrastructure Partners L.P. (NYSE:BIP), Companhia Paranaense de Energia (ADR) (NYSE:ELP), Pepco Holdings, Inc. (NYSE:POM), and Centrais Eletricas Brasileiras SA (ADR) (NYSE:EBR). This group of stocks are the members of the electric utilities industry and their market caps are similar to ITC’s market cap.