In today’s marketplace, there are a multitude of gauges investors can use to analyze Mr. Market. A couple 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 best picks of the top hedge fund managers can outperform the S&P 500 by a solid amount (see just how much).
Equally as necessary, bullish insider trading activity is a second way to look at the stock market universe. Obviously, there are a variety of motivations for an insider to drop shares of his or her company, but only one, very simple reason why they would buy. Various academic studies have demonstrated the useful potential of this strategy if "monkeys" understand what to do (learn more here).
Keeping this in mind, let's examine the latest info about The AES Corporation (NYSE:AES).
At Q2's end, a total of 21 of the hedge funds we track held long positions in this stock, a change of 5% from the first quarter. With hedgies' positions undergoing their usual ebb and flow, there exists an "upper tier" of key hedge fund managers who were upping their stakes substantially.
According to our 13F database, Israel Englander's Millennium Management had the biggest position in The AES Corporation (NYSE:AES), worth close to $45.7 million, accounting for 0.1% of its total 13F portfolio. On Millennium Management's heels is Glenn Russell Dubin of Highbridge Capital Management, with a $39.1 million position; 0.4% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions include Phill Gross and Robert Atchinson's Adage Capital Management, D. E. Shaw's D E Shaw and Ken Griffin's Citadel Investment Group.
As one would understandably expect, specific money managers were leading the bulls' herd. Millennium Management, managed by Israel Englander, established the largest position in The AES Corporation (NYSE:AES). Millennium Management had 45.7 million invested in the company at the end of the quarter. Glenn Russell Dubin's Highbridge Capital Management also initiated a $39.1 million position during the quarter. The following funds were also among the new AES investors: Phill Gross and Robert Atchinson's Adage Capital Management, D. E. Shaw's D E Shaw, and Ken Griffin's Citadel Investment Group.
Insider buying is particularly usable when the company we're looking at has experienced transactions within the past six months. Over the latest half-year time frame, The AES Corporation (NYSE:AES) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We'll go over the relationship between both of these indicators in other stocks similar to The AES Corporation (NYSE:AES). These stocks are CMS Energy Corporation (NYSE:CMS), Entergy Corporation (NYSE:ETR), Companhia Energetica Minas Gerais (ADR) (NYSE:CIG), Wisconsin Energy Corporation (NYSE:WEC), and Calpine Corporation (NYSE:CPN). This group of stocks belong to the electric utilities industry and their market caps resemble AES's market cap.