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Is MGE Energy, Inc. (MGEE) Going to Burn These Hedge Funds?

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MGE Energy, Inc. (NASDAQ:MGEE) was in 6 hedge funds’ portfolio at the end of December. MGEE has seen an increase in activity from the world’s largest hedge funds lately. There were 5 hedge funds in our database with MGEE holdings at the end of the previous quarter.

If you’d ask most traders, hedge funds are perceived as slow, outdated investment vehicles of years past. While there are greater than 8000 funds in operation at present, we look at the masters of this club, around 450 funds. It is estimated that this group oversees the majority of all hedge funds’ total capital, and by watching their top stock picks, we have spotted a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year 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 outperformed the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).


Just as beneficial, optimistic insider trading sentiment is another way to parse down the stock market universe. Obviously, there are plenty of stimuli for a bullish insider to downsize shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several empirical studies have demonstrated the market-beating potential of this strategy if piggybackers understand what to do (learn more here).

Keeping this in mind, it’s important to take a gander at the key action regarding MGE Energy, Inc. (NASDAQ:MGEE).

What does the smart money think about MGE Energy, Inc. (NASDAQ:MGEE)?

Heading into 2013, a total of 6 of the hedge funds we track were long in this stock, a change of 20% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes substantially.

According to our comprehensive database, AQR Capital Management, managed by Cliff Asness, holds the biggest position in MGE Energy, Inc. (NASDAQ:MGEE). AQR Capital Management has a $1.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On AQR Capital Management’s heels is Jim Simons of Renaissance Technologies, with a $1.6 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other hedge funds with similar optimism include D. E. Shaw’s D E Shaw, Ken Griffin’s Citadel Investment Group and Israel Englander’s Millennium Management.

With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Millennium Management, managed by Israel Englander, established the biggest position in MGE Energy, Inc. (NASDAQ:MGEE). Millennium Management had 0.2 million invested in the company at the end of the quarter.

How have insiders been trading MGE Energy, Inc. (NASDAQ:MGEE)?

Insider buying is at its handiest when the primary stock in question has experienced transactions within the past 180 days. Over the latest half-year time period, MGE Energy, Inc. (NASDAQ:MGEE) has experienced 2 unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to MGE Energy, Inc. (NASDAQ:MGEE). These stocks are Just Energy Group, Inc. Ordinary Shares (Canada) (NYSE:JE), CH Energy Group Inc (NYSE:CHG), Avista Corp (NYSE:AVA), NorthWestern Corp (NYSE:NWE), and Otter Tail Corporation (NASDAQ:OTTR). This group of stocks are the members of the diversified utilities industry and their market caps match MGEE’s market cap.

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