Is it smart to be bullish on Targa Resources Corp (NYSE:TRGP)?
To many market players, hedge funds are perceived as useless, old investment vehicles of a period lost to current times. Although there are more than 8,000 hedge funds trading in present day, this site aim at the elite of this club, about 525 funds. It is widely held that this group oversees the lion’s share of the hedge fund industry’s total assets, and by watching their best investments, we’ve identified a few investment strategies that have historically outpaced the S&P 500. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).
Equally as key, positive insider trading sentiment is a second way to analyze the investments you’re interested in. There are many stimuli for a bullish insider to drop shares of his or her company, but only one, very clear reason why they would initiate a purchase. Several academic studies have demonstrated the valuable potential of this strategy if investors understand what to do (learn more here).
Keeping this in mind, we’re going to analyze the latest info about Targa Resources Corp (NYSE:TRGP).
How are hedge funds trading Targa Resources Corp (NYSE:TRGP)?
In preparation for the third quarter, a total of 14 of the hedge funds we track held long positions in this stock, a change of 8% from one quarter earlier. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were upping their stakes significantly.
As one would understandably expect, particular hedge funds have jumped into Targa Resources Corp (NYSE:TRGP) headfirst. Renaissance Technologies, managed by Jim Simons, assembled the largest position in Targa Resources Corp (NYSE:TRGP). Renaissance Technologies had 54.2 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $39.5 million position during the quarter. The other funds with brand new TRGP positions are Clint Carlson’s Carlson Capital, D. E. Shaw’s D E Shaw, and John Overdeck and David Siegel’s Two Sigma Advisors.
How have insiders been trading Targa Resources Corp (NYSE:TRGP)?
Insider buying is at its handiest when the company we’re looking at has seen transactions within the past 180 days. Over the last 180-day time frame, Targa Resources Corp (NYSE:TRGP) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll also take a look at the relationship between both of these indicators in other stocks similar to Targa Resources Corp (NYSE:TRGP). These stocks are Atlas Energy LP (NYSE:ATLS), WGL Holdings Inc (NYSE:WGL), Piedmont Natural Gas Company, Inc. (NYSE:PNY), Suburban Propane Partners LP (NYSE:SPH), and Inergy, L.P. (NYSE:NRGY). This group of stocks are the members of the gas utilities industry and their market caps are closest to TRGP’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Atlas Energy LP (NYSE:ATLS) | 16 | 0 | 0 |
| WGL Holdings Inc (NYSE:WGL) | 9 | 0 | 0 |
| Piedmont Natural Gas Company, Inc. (NYSE:PNY) | 5 | 0 | 0 |
| Suburban Propane Partners LP (NYSE:SPH) | 4 | 0 | 0 |
| Inergy, L.P. (NYSE:NRGY) | 5 | 0 | 0 |
Using the returns demonstrated by Insider Monkey’s strategies, regular investors should always pay attention to hedge fund and insider trading sentiment, and Targa Resources Corp (NYSE:TRGP) applies perfectly to this mantra.
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