Should You Avoid UIL Holdings Corporation (UIL)?

UIL Holdings Corporation (NYSE:UIL) has experienced a decrease in hedge fund interest recently.

To the average investor, there are tons of indicators investors can use to watch stocks. A couple of the most useful are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top fund managers can outclass the broader indices by a significant amount (see just how much).

Just as integral, positive insider trading sentiment is another way to parse down the financial markets. There are many stimuli for an upper level exec to drop shares of his or her company, but only one, very simple reason why they would buy. Many academic studies have demonstrated the valuable potential of this strategy if shareholders know what to do (learn more here).

Consequently, we’re going to take a peek at the latest action surrounding UIL Holdings Corporation (NYSE:UIL).

Hedge fund activity in UIL Holdings Corporation (NYSE:UIL)

At the end of the fourth quarter, a total of 8 of the hedge funds we track held long positions in this stock, a change of -11% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their holdings significantly.

Of the funds we track, John A. Levin’s Levin Capital Strategies had the most valuable position in UIL Holdings Corporation (NYSE:UIL), worth close to $1.5 million, accounting for less than 0.1%% of its total 13F portfolio. On Levin Capital Strategies’s heels is Renaissance Technologies, managed by Jim Simons, which held a $1 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining hedge funds that are bullish include Cliff Asness’s AQR Capital Management, Israel Englander’s Millennium Management and John Zaro’s Bourgeon Capital.

Since UIL Holdings Corporation (NYSE:UIL) has experienced declining sentiment from the smart money, logic holds that there exists a select few money managers who sold off their full holdings last quarter. At the top of the heap, D. E. Shaw’s D E Shaw dropped the largest position of all the hedgies we monitor, comprising an estimated $5.1 million in stock.. Tim Flannery’s fund, Copia Capital, also said goodbye to its stock, about $3.2 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 1 funds last quarter.

What do corporate executives and insiders think about UIL Holdings Corporation (NYSE:UIL)?

Insider purchases made by high-level executives is most useful when the company in question has experienced transactions within the past six months. Over the last half-year time frame, UIL Holdings Corporation (NYSE:UIL) has seen 2 unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to UIL Holdings Corporation (NYSE:UIL). These stocks are IDACORP Inc (NYSE:IDA), Atlantic Power Corp (NYSE:AT), Portland General Electric Company (NYSE:POR), Black Hills Corp (NYSE:BKH), and UNS Energy Corp (NYSE:UNS). This group of stocks are in the electric utilities industry and their market caps resemble UIL’s market cap.

With the results demonstrated by the aforementioned studies, retail investors must always keep an eye on hedge fund and insider trading activity, and UIL Holdings Corporation (NYSE:UIL) shareholders fit into this picture quite nicely.

Click here to learn why you should track hedge funds