Sempra Energy (NYSE:SRE) has experienced an increase in activity from the world’s largest hedge funds recently.
If you’d ask most traders, hedge funds are seen as unimportant, outdated financial tools of years past. While there are greater than 8000 funds with their doors open at present, we at Insider Monkey look at the upper echelon of this group, close to 450 funds. It is widely believed that this group controls most of the smart money’s total asset base, and by watching their best investments, we have unsheathed a few investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Equally as integral, bullish insider trading sentiment is another way to break down the marketplace. Just as you’d expect, there are lots of incentives for a corporate insider to drop shares of his or her company, but only one, very clear reason why they would buy. Many academic studies have demonstrated the market-beating potential of this method if shareholders understand where to look (learn more here).
With these “truths” under our belt, it’s important to take a peek at the recent action encompassing Sempra Energy (NYSE:SRE).
What have hedge funds been doing with Sempra Energy (NYSE:SRE)?
Heading into Q2, a total of 15 of the hedge funds we track were bullish in this stock, a change of 7% from the previous quarter. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were increasing their stakes meaningfully.
Of the funds we track, Israel Englander’s Millennium Management had the biggest position in Sempra Energy (NYSE:SRE), worth close to $110.2 million, accounting for 0.5% of its total 13F portfolio. On Millennium Management’s heels is John A. Levin of Levin Capital Strategies, with a $27.3 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Other peers with similar optimism include David Harding’s Winton Capital Management, Thomas M. Fitzgerald’s Longbow Capital Partners and Ken Griffin’s Citadel Investment Group.
With a general bullishness amongst the heavyweights, key money managers have jumped into Sempra Energy (NYSE:SRE) headfirst. Stevens Capital Management, managed by Matthew Tewksbury, assembled the biggest position in Sempra Energy (NYSE:SRE). Stevens Capital Management had 8.5 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also initiated a $5.2 million position during the quarter. The other funds with new positions in the stock are Dmitry Balyasny’s Balyasny Asset Management, Israel Englander’s Millennium Management, and Matthew Hulsizer’s PEAK6 Capital Management.
How have insiders been trading Sempra Energy (NYSE:SRE)?
Insider purchases made by high-level executives is at its handiest when the primary stock in question has experienced transactions within the past half-year. Over the last 180-day time frame, Sempra Energy (NYSE:SRE) has seen zero unique insiders purchasing, and 8 insider sales (see the details of insider trades here).
With the results shown by our studies, everyday investors should always keep an eye on hedge fund and insider trading activity, and Sempra Energy (NYSE:SRE) is an important part of this process.