This Metric Says You Are Smart to Sell Vectren Corporation (VVC)

Vectren Corporation (NYSE:VVC) shareholders have witnessed a decrease in hedge fund interest in recent months. In today’s marketplace, there are tons of metrics market participants can use to track their holdings. A couple of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top investment managers can outpace the broader indices by a solid margin (see just how much). Just as important, optimistic insider trading sentiment is another way to parse down the marketplace. Just as you’d expect, there are a number of incentives for an insider to get rid of shares of his or her company, but just one, very obvious reason why they would buy. Several empirical studies have demonstrated the impressive potential of this method if you know where to look (learn more here). Now, we’re going to take a gander at the latest action encompassing Vectren Corporation (NYSE:VVC).

What does the smart money think about Vectren Corporation (NYSE:VVC)?

At Q1’s end, a total of 9 of the hedge funds we track were bullish in this stock, a change of -10% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their holdings significantly. When looking at the hedgies we track, Phill Gross and Robert Atchinson’s Adage Capital Management had the biggest position in Vectren Corporation (NYSE:VVC), worth close to $17.7 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by D. E. Shaw of D E Shaw, with a $6.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds with similar optimism include Jim Simons’s Renaissance Technologies, Joel Greenblatt’s Gotham Asset Management and Matthew Hulsizer’s PEAK6 Capital Management. Because Vectren Corporation (NYSE:VVC) has experienced bearish sentiment from the aggregate hedge fund industry, logic holds that there is a sect of hedge funds that decided to sell off their entire stakes in Q1. Interestingly, Matthew Tewksbury’s Stevens Capital Management said goodbye to the biggest investment of the “upper crust” of funds we track, totaling close to $1 million in stock.. Ken Griffin’s fund, Citadel Investment Group, also dropped its stock, about $0.5 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds in Q1.

How have insiders been trading Vectren Corporation (NYSE:VVC)?

Bullish insider trading is most useful when the company in question has seen transactions within the past six months. Over the latest half-year time frame, Vectren Corporation (NYSE:VVC) has seen zero unique insiders buying, 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 Vectren Corporation (NYSE:VVC). These stocks are PNM Resources, Inc. (NYSE:PNM), ALLETE Inc (NYSE:ALE), UGI Corp (NYSE:UGI), Westar Energy Inc (NYSE:WR), and TransAlta Corporation (USA) (NYSE:TAC). This group of stocks are in the diversified utilities industry and their market caps resemble VVC’s market cap.

With the results demonstrated by our studies, retail investors should always monitor hedge fund and insider trading sentiment, and Vectren Corporation (NYSE:VVC) applies perfectly to this mantra. Click here to learn why you should track hedge funds