Companhia Paranaense de Energia (ADR) (NYSE:ELP) was in 6 hedge funds’ portfolio at the end of the fourth quarter of 2012. ELP investors should pay attention to a decrease in enthusiasm from smart money of late. There were 7 hedge funds in our database with ELP positions at the end of the previous quarter.
If you’d ask most market participants, hedge funds are perceived as slow, old financial vehicles of years past. While there are more than 8000 funds with their doors open at the moment, we at Insider Monkey choose to focus on the leaders of this club, about 450 funds. Most estimates calculate that this group controls the majority of all hedge funds’ total capital, and by paying attention to their top equity investments, we have revealed a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outperformed 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 outperformed the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Just as important, bullish insider trading activity is another way to parse down the investments you’re interested in. There are plenty of motivations for an insider to cut shares of his or her company, but only one, very clear reason why they would behave bullishly. Several empirical studies have demonstrated the useful potential of this method if you know what to do (learn more here).
Consequently, we’re going to take a glance at the latest action regarding Companhia Paranaense de Energia (ADR) (NYSE:ELP).
How are hedge funds trading Companhia Paranaense de Energia (ADR) (NYSE:ELP)?
In preparation for this year, a total of 6 of the hedge funds we track were bullish in this stock, a change of -14% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were upping their stakes substantially.
When looking at the hedgies we track, Jim Simons’s Renaissance Technologies had the biggest position in Companhia Paranaense de Energia (ADR) (NYSE:ELP), worth close to $8.9 million, comprising less than 0.1%% of its total 13F portfolio. Coming in second is Cliff Asness of AQR Capital Management, with a $2.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Ken Griffin’s Citadel Investment Group, Steven Cohen’s SAC Capital Advisors and John Overdeck and David Siegel’s Two Sigma Advisors.
Because Companhia Paranaense de Energia (ADR) (NYSE:ELP) has witnessed bearish sentiment from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of hedgies who were dropping their full holdings last quarter. It’s worth mentioning that J. Alan Reid, Jr.’s Forward Management sold off the largest stake of the “upper crust” of funds we watch, valued at close to $1.4 million in stock.. Israel Englander’s fund, Millennium Management, also dumped its stock, about $0.4 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds last quarter.
What have insiders been doing with Companhia Paranaense de Energia (ADR) (NYSE:ELP)?
Bullish insider trading is most useful when the company in question has experienced transactions within the past six months. Over the latest six-month time frame, Companhia Paranaense de Energia (ADR) (NYSE:ELP) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Companhia Paranaense de Energia (ADR) (NYSE:ELP). These stocks are Great Plains Energy Incorporated (NYSE:GXP), Pepco Holdings, Inc. (NYSE:POM), ITC Holdings Corp. (NYSE:ITC), TECO Energy, Inc. (NYSE:TE), and Centrais Eletricas Brasileiras SA (ADR) (NYSE:EBR). This group of stocks belong to the electric utilities industry and their market caps are similar to ELP’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Great Plains Energy Incorporated (NYSE:GXP) | 13 | 0 | 2 |
| Pepco Holdings, Inc. (NYSE:POM) | 6 | 0 | 1 |
| ITC Holdings Corp. (NYSE:ITC) | 12 | 0 | 4 |
| TECO Energy, Inc. (NYSE:TE) | 10 | 0 | 4 |
| Centrais Eletricas Brasileiras SA (ADR) (NYSE:EBR) | 7 | 0 | 0 |
With the results shown by our tactics, everyday investors should always monitor hedge fund and insider trading sentiment, and Companhia Paranaense de Energia (ADR) (NYSE:ELP) is no exception.
