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Atmos Energy Corporation (ATO): Insiders Aren’t Crazy About It

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Is Atmos Energy Corporation (NYSE:ATO) a buy, sell, or hold? The smart money is in an optimistic mood. The number of bullish hedge fund bets rose by 1 in recent months.

To most shareholders, hedge funds are seen as slow, old financial vehicles of the past. While there are over 8000 funds with their doors open at present, we at Insider Monkey hone in on the elite of this group, around 450 funds. It is widely believed that this group oversees most of the hedge fund industry’s total capital, and by monitoring their top picks, we have brought to light a few investment strategies that have historically outperformed the market. 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 trumped the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).


Equally as important, positive insider trading sentiment is another way to break down the stock market universe. Obviously, there are lots of incentives for an upper level exec to cut shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Various empirical studies have demonstrated the useful potential of this strategy if investors understand where to look (learn more here).

Keeping this in mind, it’s important to take a look at the recent action regarding Atmos Energy Corporation (NYSE:ATO).

How have hedgies been trading Atmos Energy Corporation (NYSE:ATO)?

Heading into Q2, a total of 6 of the hedge funds we track were long in this stock, a change of 20% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were upping their holdings meaningfully.

According to our comprehensive database, CSat Investment Advisory, managed by Claes Fornell, holds the biggest position in Atmos Energy Corporation (NYSE:ATO). CSat Investment Advisory has a $2.9 million position in the stock, comprising 1.1% of its 13F portfolio. Sitting at the No. 2 spot is Cliff Asness of AQR Capital Management, with a $2.3 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other hedge funds that hold long positions include Joel Greenblatt’s Gotham Asset Management, Israel Englander’s Millennium Management and Matthew Hulsizer’s PEAK6 Capital Management.

Now, key money managers were breaking ground themselves. Gotham Asset Management, managed by Joel Greenblatt, established the largest position in Atmos Energy Corporation (NYSE:ATO). Gotham Asset Management had 1 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also initiated a $0.4 million position during the quarter. The only other fund with a brand new ATO position is David Costen Haley’s HBK Investments.

Insider trading activity in Atmos Energy Corporation (NYSE:ATO)

Insider purchases made by high-level executives is most useful when the primary stock in question has seen transactions within the past half-year. Over the latest 180-day time frame, Atmos Energy Corporation (NYSE:ATO) has experienced zero unique insiders buying, and 3 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Atmos Energy Corporation (NYSE:ATO). These stocks are Targa Resources Corp (NYSE:TRGP), AGL Resources Inc. (NYSE:GAS), Integrys Energy Group, Inc. (NYSE:TEG), Questar Corporation (NYSE:STR), and AmeriGas Partners, L.P. (NYSE:APU). This group of stocks belong to the gas utilities industry and their market caps are similar to ATO’s market cap.

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