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Quanta Services Inc (PWR): Hedge Funds Aren’t Crazy About It, Insider Sentiment Unchanged

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In the eyes of many investors, hedge funds are seen as overrated, outdated investment vehicles of a forgotten age. Although there are over 8,000 hedge funds in operation currently, Insider Monkey focuses on the upper echelon of this club, close to 525 funds. It is widely held that this group controls most of the smart money’s total assets, and by paying attention to their best picks, we’ve determined a number of investment strategies that have historically outperformed the market. 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 topped the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).

Equally as crucial, positive insider trading activity is a second way to analyze the stock market universe. As the old adage goes: there are many stimuli for an insider to drop shares of his or her company, but only one, very obvious reason why they would behave bullishly. Many academic studies have demonstrated the impressive potential of this strategy if piggybackers understand where to look (learn more here).

Now that that’s out of the way, it’s important to analyze the recent info surrounding Quanta Services Inc (NYSE:PWR).

How have hedgies been trading Quanta Services Inc (NYSE:PWR)?

In preparation for the third quarter, a total of 33 of the hedge funds we track held long positions in this stock, a change of -6% from the previous quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes significantly.

Quanta Services Inc (NYSE:PWR)According to our 13F database, Peconic Partners LLC, managed by William Harnisch, holds the biggest position in Quanta Services Inc (NYSE:PWR). Peconic Partners LLC has a $59.4 million position in the stock, comprising 7.9% of its 13F portfolio. Coming in second is Eric Bannasch of Cadian Capital, with a $33.1 million position; 1% of its 13F portfolio is allocated to the company. Other hedge funds that are bullish include John Overdeck and David Siegel’s Two Sigma Advisors, Israel Englander’s Millennium Management and John A. Levin’s Levin Capital Strategies.

As Quanta Services Inc (NYSE:PWR) has faced declining interest from the entirety of the hedge funds we track, it’s easy to see that there was a specific group of money managers that elected to cut their full holdings last quarter. At the top of the heap, Donald Chiboucis’s Columbus Circle Investors sold off the largest investment of all the hedgies we key on, totaling an estimated $57.8 million in stock. Jeffrey Vinik’s fund, Vinik Asset Management, also dumped its stock, about $23.7 million worth. These moves are interesting, as total hedge fund interest was cut by 2 funds last quarter.

How have insiders been trading Quanta Services Inc (NYSE:PWR)?

Insider buying made by high-level executives is at its handiest when the primary stock in question has seen transactions within the past half-year. Over the latest half-year time period, Quanta Services Inc (NYSE:PWR) has experienced zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).

We’ll also take a look at the relationship between both of these indicators in other stocks similar to Quanta Services Inc (NYSE:PWR). These stocks are Pike Electric Corporation (NYSE:PIKE), MYR Group Inc (NASDAQ:MYRG), Comfort Systems USA, Inc. (NYSE:FIX), Emcor Group Inc (NYSE:EME), and Chicago Bridge & Iron Company N.V. (NYSE:CBI). This group of stocks are the members of the general contractors industry and their market caps match PWR’s market cap.

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