NV Energy, Inc. (NYSE:NVE) was in 13 hedge funds’ portfolio at the end of the fourth quarter of 2012. NVE investors should pay attention to an increase in hedge fund interest in recent months. There were 8 hedge funds in our database with NVE holdings at the end of the previous quarter.
If you’d ask most investors, hedge funds are assumed to be unimportant, old financial vehicles of years past. While there are more than 8000 funds with their doors open today, we at Insider Monkey choose to focus on the elite of this club, around 450 funds. It is estimated that this group has its hands on most of the hedge fund industry’s total capital, and by keeping an eye on their highest performing picks, we have unsheathed a few investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum 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 trumped the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Just as important, positive insider trading sentiment is a second way to break down the marketplace. There are lots of reasons for an executive to get rid of shares of his or her company, but only one, very obvious reason why they would buy. Plenty of empirical studies have demonstrated the market-beating potential of this tactic if piggybackers know where to look (learn more here).
With all of this in mind, it’s important to take a look at the latest action encompassing NV Energy, Inc. (NYSE:NVE).
Hedge fund activity in NV Energy, Inc. (NYSE:NVE)
At the end of the fourth quarter, a total of 13 of the hedge funds we track were bullish in this stock, a change of 63% from the third quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their stakes meaningfully.
According to our comprehensive database, Dreman Value Management, managed by David Dreman, holds the most valuable position in NV Energy, Inc. (NYSE:NVE). Dreman Value Management has a $25 million position in the stock, comprising 0.7% of its 13F portfolio. Coming in second is AQR Capital Management, managed by Cliff Asness, which held a $10 million position; the fund has 0% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Israel Englander’s Millennium Management, Phill Gross and Robert Atchinson’s Adage Capital Management and John Overdeck and David Siegel’s Two Sigma Advisors.
With a general bullishness amongst the heavyweights, specific money managers have jumped into NV Energy, Inc. (NYSE:NVE) headfirst. Adage Capital Management, managed by Phill Gross and Robert Atchinson, established the biggest position in NV Energy, Inc. (NYSE:NVE). Adage Capital Management had 5 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $1 million position during the quarter. The following funds were also among the new NVE investors: Ken Griffin’s Citadel Investment Group, David Costen Haley’s HBK Investments, and Mike Vranos’s Ellington.
How are insiders trading NV Energy, Inc. (NYSE:NVE)?
Insider trading activity, especially when it’s bullish, is most useful when the company in question has experienced transactions within the past 180 days. Over the latest half-year time frame, NV Energy, Inc. (NYSE:NVE) has seen zero unique insiders buying, and 4 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to NV Energy, Inc. (NYSE:NVE). These stocks are Ameren Corp (NYSE:AEE), Vectren Corporation (NYSE:VVC), TransAlta Corporation (USA) (NYSE:TAC), Westar Energy Inc (NYSE:WR), and UGI Corp (NYSE:UGI). This group of stocks are the members of the diversified utilities industry and their market caps are similar to NVE’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Ameren Corp (NYSE:AEE) | 21 | 0 | 0 |
| Vectren Corporation (NYSE:VVC) | 9 | 0 | 0 |
| TransAlta Corporation (USA) (NYSE:TAC) | 3 | 0 | 0 |
| Westar Energy Inc (NYSE:WR) | 7 | 0 | 5 |
| UGI Corp (NYSE:UGI) | 12 | 3 | 4 |
With the returns demonstrated by the aforementioned studies, everyday investors must always pay attention to hedge fund and insider trading activity, and NV Energy, Inc. (NYSE:NVE) applies perfectly to this mantra.
