Do Hedge Funds and Insiders Love National Grid plc (ADR) (NGG)?

Is National Grid plc (ADR) (NYSE:NGG) the right investment to pursue these days? Investors who are in the know are taking an optimistic view. The number of long hedge fund bets inched up by 3 recently.

National Grid plc (ADR) (NYSE:NGG)

To most investors, hedge funds are assumed to be worthless, old investment tools of the past. While there are over 8000 funds in operation today, we hone in on the aristocrats of this group, close to 450 funds. It is estimated that this group has its hands on most of the hedge fund industry’s total asset base, and by monitoring their highest performing equity investments, we have spotted a number of investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year 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 outclassed the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).

Just as key, optimistic insider trading activity is another way to parse down the investments you’re interested in. There are plenty of motivations for an insider to sell shares of his or her company, but just one, very clear reason why they would initiate a purchase. Several academic studies have demonstrated the useful potential of this tactic if shareholders know what to do (learn more here).

With these “truths” under our belt, let’s take a glance at the key action encompassing National Grid plc (ADR) (NYSE:NGG).

What does the smart money think about National Grid plc (ADR) (NYSE:NGG)?

At year’s end, a total of 8 of the hedge funds we track were long in this stock, a change of 60% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes substantially.

According to our comprehensive database, Charles Clough’s Clough Capital Partners had the largest position in National Grid plc (ADR) (NYSE:NGG), worth close to $25.1 million, comprising 0.8% of its total 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, managed by Jim Simons, which held a $12.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include D. E. Shaw’s D E Shaw, John A. Levin’s Levin Capital Strategies and Steven Cohen’s SAC Capital Advisors.

As aggregate interest increased, some big names were leading the bulls’ herd. D E Shaw, managed by D. E. Shaw, created the biggest position in National Grid plc (ADR) (NYSE:NGG). D E Shaw had 3.3 million invested in the company at the end of the quarter. Steven Cohen’s SAC Capital Advisors also initiated a $0.7 million position during the quarter. The other funds with brand new NGG positions are Ken Griffin’s Citadel Investment Group and John Overdeck and David Siegel’s Two Sigma Advisors.

How have insiders been trading National Grid plc (ADR) (NYSE:NGG)?

Insider trading activity, especially when it’s bullish, is most useful when the primary stock in question has experienced transactions within the past half-year. Over the latest six-month time frame, National Grid plc (ADR) (NYSE:NGG) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to National Grid plc (ADR) (NYSE:NGG). These stocks are Western Gas Equity Partners LP (NYSE:WGP), ONEOK, Inc. (NYSE:OKE), EQT Corporation (NYSE:EQT), Sempra Energy (NYSE:SRE), and TransCanada Corporation (USA) (NYSE:TRP). This group of stocks belong to the gas utilities industry and their market caps resemble NGG’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Western Gas Equity Partners LP (NYSE:WGP) 2 9 0
ONEOK, Inc. (NYSE:OKE) 14 0 1
EQT Corporation (NYSE:EQT) 28 3 3
Sempra Energy (NYSE:SRE) 12 0 9
TransCanada Corporation (USA) (NYSE:TRP) 4 0 0

With the returns exhibited by our time-tested strategies, everyday investors should always keep an eye on hedge fund and insider trading sentiment, and National Grid plc (ADR) (NYSE:NGG) is an important part of this process.

Click here to learn why you should track hedge funds

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

The 10 Longest Wars of All Time

The 13 Worst Looking Foods that Taste Great

The 6 Most Gruesome Injuries Suffered During a Sports Match

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!