Is California Water Service Group (NYSE:CWT) a bargain? The smart money is in an optimistic mood. The number of bullish hedge fund bets rose by 7 in recent months.
According to most shareholders, hedge funds are seen as unimportant, outdated financial vehicles of yesteryear. While there are greater than 8000 funds trading at present, we at Insider Monkey hone in on the aristocrats of this group, about 450 funds. Most estimates calculate that this group controls the majority of the hedge fund industry’s total capital, and by tracking their highest performing stock picks, we have discovered a few investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outstripped 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 23.3 percentage points in 8 months (check out a sample of our picks).
Equally as beneficial, bullish insider trading sentiment is another way to break down the financial markets. As the old adage goes: there are many incentives for an executive to downsize shares of his or her company, but only one, very simple reason why they would buy. Plenty of academic studies have demonstrated the market-beating potential of this method if you understand what to do (learn more here).
Keeping this in mind, let’s take a look at the key action encompassing California Water Service Group (NYSE:CWT).
Hedge fund activity in California Water Service Group (NYSE:CWT)
At the end of the first quarter, a total of 13 of the hedge funds we track were long in this stock, a change of 117% from the first quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their holdings meaningfully.
Of the funds we track, John I. Dickerson’s Summit Global Management had the largest position in California Water Service Group (NYSE:CWT), worth close to $11.3 million, comprising 9.1% of its total 13F portfolio. The second largest stake is held by Millennium Management, managed by Israel Englander, which held a $8.5 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other hedge funds with similar optimism include Phill Gross and Robert Atchinson’s Adage Capital Management, Cliff Asness’s AQR Capital Management and Anand Parekh’s Alyeska Investment Group.
Now, specific money managers were breaking ground themselves. Summit Global Management, managed by John I. Dickerson, assembled the largest position in California Water Service Group (NYSE:CWT). Summit Global Management had 11.3 million invested in the company at the end of the quarter. Phill Gross and Robert Atchinson’s Adage Capital Management also initiated a $7 million position during the quarter. The other funds with brand new CWT positions are Anand Parekh’s Alyeska Investment Group, Jim Simons’s Renaissance Technologies, and D. E. Shaw’s D E Shaw.
Insider trading activity in California Water Service Group (NYSE:CWT)
Insider buying is at its handiest when the company in focus has experienced transactions within the past half-year. Over the latest six-month time frame, California Water Service Group (NYSE:CWT) has experienced 20 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to California Water Service Group (NYSE:CWT). These stocks are The York Water Company (NASDAQ:YORW), Middlesex Water Company (NASDAQ:MSEX), Connecticut Water Service, Inc. (NASDAQ:CTWS), SJW Corp. (NYSE:SJW), and American States Water Co (NYSE:AWR). This group of stocks are the members of the water utilities industry and their market caps are similar to CWT’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| The York Water Company (NASDAQ:YORW) | 3 | 4 | 2 |
| Middlesex Water Company (NASDAQ:MSEX) | 4 | 0 | 0 |
| Connecticut Water Service, Inc. (NASDAQ:CTWS) | 6 | 1 | 1 |
| SJW Corp. (NYSE:SJW) | 7 | 0 | 1 |
| American States Water Co (NYSE:AWR) | 7 | 1 | 3 |
With the results shown by Insider Monkey’s time-tested strategies, everyday investors should always monitor hedge fund and insider trading sentiment, and California Water Service Group (NYSE:CWT) is no exception.
