To most shareholders, hedge funds are viewed as slow, outdated investment vehicles of years past. While there are over 8000 funds trading at present, we at Insider Monkey hone in on the crème de la crème of this club, close to 450 funds. Most estimates calculate that this group oversees the majority of all hedge funds’ total capital, and by tracking their top stock picks, we have found a few investment strategies that have historically beaten the broader indices. 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 outpaced the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Just as important, positive insider trading sentiment is a second way to parse down the stock market universe. Just as you’d expect, there are many reasons for an insider to downsize shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Many empirical studies have demonstrated the useful potential of this tactic if piggybackers know what to do (learn more here).
Consequently, let’s take a gander at the key action surrounding The Empire District Electric Company (NYSE:EDE).
How have hedgies been trading The Empire District Electric Company (NYSE:EDE)?
At Q1’s end, a total of 5 of the hedge funds we track were bullish in this stock, a change of 25% from the first quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their stakes considerably.
When looking at the hedgies we track, Jim Simons’s Renaissance Technologies had the largest position in The Empire District Electric Company (NYSE:EDE), worth close to $6.2 million, accounting for less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Israel Englander of Millennium Management, with a $3 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other hedge funds with similar optimism include D. E. Shaw’s D E Shaw, Thomas M. Fitzgerald’s Longbow Capital Partners and Ken Griffin’s Citadel Investment Group.
As aggregate interest increased, key hedge funds were breaking ground themselves. Longbow Capital Partners, managed by Thomas M. Fitzgerald, initiated the most outsized position in The Empire District Electric Company (NYSE:EDE). Longbow Capital Partners had 1.3 million invested in the company at the end of the quarter.
What do corporate executives and insiders think about The Empire District Electric Company (NYSE:EDE)?
Insider buying is most useful when the company in focus has seen transactions within the past 180 days. Over the latest half-year time frame, The Empire District Electric Company (NYSE:EDE) has experienced zero unique insiders buying, 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 The Empire District Electric Company (NYSE:EDE). These stocks are UIL Holdings Corporation (NYSE:UIL), Black Hills Corp (NYSE:BKH), Atlantic Power Corp (NYSE:AT), El Paso Electric Company (NYSE:EE), and Ormat Technologies, Inc. (NYSE:ORA). This group of stocks belong to the electric utilities industry and their market caps resemble EDE’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| UIL Holdings Corporation (NYSE:UIL) | 5 | 1 | 3 |
| Black Hills Corp (NYSE:BKH) | 7 | 0 | 0 |
| Atlantic Power Corp (NYSE:AT) | 6 | 3 | 0 |
| El Paso Electric Company (NYSE:EE) | 12 | 1 | 2 |
| Ormat Technologies, Inc. (NYSE:ORA) | 7 | 0 | 0 |
With the returns shown by the aforementioned studies, retail investors should always watch hedge fund and insider trading sentiment, and The Empire District Electric Company (NYSE:EDE) shareholders fit into this picture quite nicely.
