Piedmont Natural Gas Company, Inc. (NYSE:PNY) investors should be aware of an increase in hedge fund sentiment lately.
To most market participants, hedge funds are assumed to be unimportant, outdated financial vehicles of yesteryear. While there are more than 8000 funds trading today, we hone in on the top tier of this group, around 450 funds. It is estimated that this group has its hands on the majority of the hedge fund industry’s total capital, and by watching their top equity investments, we have unsheathed a few investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outpaced 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 outclassed the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Just as beneficial, optimistic insider trading sentiment is a second way to parse down the financial markets. As the old adage goes: there are lots of reasons for a corporate insider to downsize shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the valuable potential of this method if “monkeys” understand where to look (learn more here).
With all of this in mind, it’s important to take a glance at the latest action surrounding Piedmont Natural Gas Company, Inc. (NYSE:PNY).
Hedge fund activity in Piedmont Natural Gas Company, Inc. (NYSE:PNY)
At the end of the fourth quarter, a total of 5 of the hedge funds we track were long in this stock, a change of 25% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes meaningfully.
Of the funds we track, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Piedmont Natural Gas Company, Inc. (NYSE:PNY). Royce & Associates has a $16.9 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $4.8 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism include Ken Griffin’s Citadel Investment Group, Mario Gabelli’s GAMCO Investors and David Harding’s Winton Capital Management.
Now, key hedge funds were leading the bulls’ herd. Renaissance Technologies, managed by Jim Simons, established the most valuable position in Piedmont Natural Gas Company, Inc. (NYSE:PNY). Renaissance Technologies had 4.8 million invested in the company at the end of the quarter. David Harding’s Winton Capital Management also made a $0.3 million investment in the stock during the quarter.
What have insiders been doing with Piedmont Natural Gas Company, Inc. (NYSE:PNY)?
Insider purchases made by high-level executives is best served when the company in focus has seen transactions within the past 180 days. Over the last six-month time period, Piedmont Natural Gas Company, Inc. (NYSE:PNY) has seen 1 unique insiders buying, and 1 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Piedmont Natural Gas Company, Inc. (NYSE:PNY). These stocks are Southwest Gas Corporation (NYSE:SWX), Atlas Energy LP (NYSE:ATLS), WGL Holdings Inc (NYSE:WGL), Inergy, L.P. (NYSE:NRGY), and Suburban Propane Partners LP (NYSE:SPH). This group of stocks are the members of the gas utilities industry and their market caps are similar to PNY’s market cap.