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PG&E Corporation (PCG): Insiders Aren’t Crazy About It

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PG&E Corporation (NYSE:PCG) was in 11 hedge funds’ portfolio at the end of March. PCG investors should pay attention to a decrease in activity from the world’s largest hedge funds recently. There were 16 hedge funds in our database with PCG holdings at the end of the previous quarter.

To most investors, hedge funds are perceived as worthless, old investment tools of years past. While there are more than 8000 funds with their doors open today, we at Insider Monkey choose to focus on the aristocrats of this club, around 450 funds. It is estimated that this group controls most of the hedge fund industry’s total asset base, and by keeping an eye on their best equity investments, we have figured out a few investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outstripped 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 outpaced the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Equally as important, bullish insider trading activity is another way to parse down the investments you’re interested in. Just as you’d expect, there are a number of incentives for an upper level exec to get rid of shares of his or her company, but just one, very obvious reason why they would behave bullishly. Plenty of empirical studies have demonstrated the impressive potential of this strategy if shareholders know where to look (learn more here).

With these “truths” under our belt, let’s take a look at the recent action regarding PG&E Corporation (NYSE:PCG).

How are hedge funds trading PG&E Corporation (NYSE:PCG)?

At the end of the first quarter, a total of 11 of the hedge funds we track were bullish in this stock, a change of -31% from the first quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their stakes substantially.

PG&E Corporation (PCG)According to our comprehensive database, Levin Capital Strategies, managed by John A. Levin, holds the biggest position in PG&E Corporation (NYSE:PCG). Levin Capital Strategies has a $150.2 million position in the stock, comprising 2.7% of its 13F portfolio. The second largest stake is held by D. E. Shaw of D E Shaw, with a $54.8 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include Israel Englander’s Millennium Management, Daniel S. Och’s OZ Management and Ken Griffin’s Citadel Investment Group.

Due to the fact that PG&E Corporation (NYSE:PCG) has faced a declination in interest from the aggregate hedge fund industry, it’s safe to say that there is a sect of hedge funds that slashed their positions entirely heading into Q2. It’s worth mentioning that Stanley Druckenmiller’s Duquesne Capital dropped the biggest position of all the hedgies we monitor, worth about $24.9 million in stock.. Jim Simons’s fund, Renaissance Technologies, also dumped its stock, about $13.3 million worth. These moves are interesting, as total hedge fund interest was cut by 5 funds heading into Q2.

Insider trading activity in PG&E Corporation (NYSE:PCG)

Bullish insider trading is particularly usable when the company we’re looking at has seen transactions within the past half-year. Over the latest 180-day time frame, PG&E Corporation (NYSE:PCG) has seen zero unique insiders purchasing, and 7 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to PG&E Corporation (NYSE:PCG). These stocks are Edison International (NYSE:EIX), Korea Electric Power Corporation (ADR) (NYSE:KEP), FirstEnergy Corp. (NYSE:FE), Consolidated Edison, Inc. (NYSE:ED), and PPL Corporation (NYSE:PPL). This group of stocks are the members of the electric utilities industry and their market caps are closest to PCG’s market cap.

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