El Paso Electric Company (NYSE:EE) investors should pay attention to a decrease in hedge fund sentiment lately.
At the moment, there are plenty of indicators market participants can use to monitor Mr. Market. Some of the most useful are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top money managers can beat the broader indices by a significant amount (see just how much).
Just as key, bullish insider trading sentiment is a second way to parse down the investments you’re interested in. There are a variety of reasons for an upper level exec to drop shares of his or her company, but just one, very simple reason why they would behave bullishly. Many academic studies have demonstrated the valuable potential of this tactic if you know what to do (learn more here).
With these “truths” under our belt, let’s take a glance at the recent action regarding El Paso Electric Company (NYSE:EE).
What have hedge funds been doing with El Paso Electric Company (NYSE:EE)?
In preparation for this quarter, a total of 12 of the hedge funds we track were bullish in this stock, a change of -8% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes significantly.
When looking at the hedgies we track, Mario Gabelli’s GAMCO Investors had the biggest position in El Paso Electric Company (NYSE:EE), worth close to $63.4 million, comprising 0.4% of its total 13F portfolio. Coming in second is Adage Capital Management, managed by Phill Gross and Robert Atchinson, which held a $40.3 million position; 0.1% of its 13F portfolio is allocated to the company. Some other peers that are bullish include D. E. Shaw’s D E Shaw, Israel Englander’s Millennium Management and Cliff Asness’s AQR Capital Management.
Judging by the fact that El Paso Electric Company (NYSE:EE) has experienced falling interest from the entirety of the hedge funds we track, we can see that there were a few funds who were dropping their entire stakes heading into Q2. It’s worth mentioning that Jim Simons’s Renaissance Technologies dumped the largest stake of the 450+ funds we watch, worth close to $0.8 million in stock., and Matthew Tewksbury of Stevens Capital Management was right behind this move, as the fund dumped about $0.7 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 1 funds heading into Q2.
What have insiders been doing with El Paso Electric Company (NYSE:EE)?
Bullish insider trading is at its handiest when the company we’re looking at has experienced transactions within the past half-year. Over the latest 180-day time period, El Paso Electric Company (NYSE:EE) has seen 1 unique insiders purchasing, and 2 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to El Paso Electric Company (NYSE:EE). These stocks are UIL Holdings Corporation (NYSE:UIL), Black Hills Corp (NYSE:BKH), Ormat Technologies, Inc. (NYSE:ORA), The Empire District Electric Company (NYSE:EDE), and Atlantic Power Corp (NYSE:AT). This group of stocks are in the electric utilities industry and their market caps are similar to EE’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 |
| Ormat Technologies, Inc. (NYSE:ORA) | 7 | 0 | 0 |
| The Empire District Electric Company (NYSE:EDE) | 5 | 0 | 2 |
| Atlantic Power Corp (NYSE:AT) | 6 | 3 | 0 |
With the returns shown by Insider Monkey’s research, everyday investors should always pay attention to hedge fund and insider trading activity, and El Paso Electric Company (NYSE:EE) is an important part of this process.
