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Hedge Funds Are Dumping Northwest Natural Gas Co (NWN)

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Northwest Natural Gas Co (NYSE:NWN) was in 6 hedge funds’ portfolio at the end of the first quarter of 2013. NWN has experienced a decrease in hedge fund interest of late. There were 6 hedge funds in our database with NWN positions at the end of the previous quarter.


If you’d ask most investors, hedge funds are seen as underperforming, old investment vehicles of the past. While there are more than 8000 funds in operation at present, we at Insider Monkey look at the elite of this club, close to 450 funds. It is estimated that this group oversees the lion’s share of the hedge fund industry’s total asset base, and by monitoring their best stock picks, we have revealed a few 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 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 23.3 percentage points in 8 months (see the details here).

Just as important, positive insider trading sentiment is another way to break down the marketplace. Obviously, there are a variety of motivations for an upper level exec to get rid of shares of his or her company, but only one, very clear reason why they would buy. Many empirical studies have demonstrated the impressive potential of this tactic if “monkeys” know where to look (learn more here).

With these “truths” under our belt, let’s take a peek at the recent action encompassing Northwest Natural Gas Co (NYSE:NWN).

What does the smart money think about Northwest Natural Gas Co (NYSE:NWN)?

In preparation for this quarter, a total of 6 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes meaningfully.

When looking at the hedgies we track, Fisher Asset Management, managed by Ken Fisher, holds the largest position in Northwest Natural Gas Co (NYSE:NWN). Fisher Asset Management has a $11.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Citadel Investment Group, managed by Ken Griffin, which held a $7.2 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other peers with similar optimism include Israel Englander’s Millennium Management, Ken Gray and Steve Walsh’s Bryn Mawr Capital and Cliff Asness’s AQR Capital Management.

Since Northwest Natural Gas Co (NYSE:NWN) has faced falling interest from hedge fund managers, we can see that there were a few money managers who sold off their full holdings last quarter. Interestingly, Jim Simons’s Renaissance Technologies dropped the largest investment of all the hedgies we track, worth about $1.2 million in stock.. Matthew Hulsizer’s fund, PEAK6 Capital Management, also dropped its call options., about $0.3 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

What do corporate executives and insiders think about Northwest Natural Gas Co (NYSE:NWN)?

Bullish insider trading is most useful when the company in question has experienced transactions within the past half-year. Over the last six-month time frame, Northwest Natural Gas Co (NYSE:NWN) has experienced zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Northwest Natural Gas Co (NYSE:NWN). These stocks are Niska Gas Storage Partners LLC (NYSE:NKA), Laclede Group Inc (NYSE:LG), Summit Midstream Partners LP (NYSE:SMLP), PAA Natural Gas Storage, L.P. (NYSE:PNG), and Clean Energy Fuels Corp (NASDAQ:CLNE). All of these stocks are in the gas utilities industry and their market caps match NWN’s market cap.

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