Is Spectra Energy Corp. (NYSE:SE) undervalued? Money managers are selling. The number of bullish hedge fund bets stayed the same which is a slightly negative development in our experience.
To the average investor, there are many methods investors can use to watch their holdings. Some of the most innovative are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top fund managers can trounce their index-focused peers by a solid amount (see just how much).
Equally as key, positive insider trading sentiment is another way to parse down the marketplace. As the old adage goes: there are a variety of incentives for a bullish insider to cut shares of his or her company, but only one, very obvious reason why they would behave bullishly. Many academic studies have demonstrated the market-beating potential of this strategy if piggybackers know where to look (learn more here).
Consequently, let’s take a gander at the latest action regarding Spectra Energy Corp. (NYSE:SE).
How have hedgies been trading Spectra Energy Corp. (NYSE:SE)?
Heading into 2013, a total of 13 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their stakes significantly.
According to our comprehensive database, Alec Litowitz and Ross Laser’s Magnetar Capital had the most valuable position in Spectra Energy Corp. (NYSE:SE), worth close to $36 million, accounting for 1.7% of its total 13F portfolio. On Magnetar Capital’s heels is Ken Griffin of Citadel Investment Group, with a $35 million position; 1.7% of its 13F portfolio is allocated to the stock. Some other hedgies that hold long positions include Daniel Bubis’s Tetrem Capital Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Dmitry Balyasny’s Balyasny Asset Management.
Due to the fact that Spectra Energy Corp. (NYSE:SE) has faced declining sentiment from the smart money, logic holds that there were a few hedge funds that decided to sell off their entire stakes at the end of the year. Intriguingly, Israel Englander’s Millennium Management dropped the largest investment of the “upper crust” of funds we track, worth close to $5 million in stock.. Daniel S. Och’s fund, OZ Management, also dumped its call options., about $2 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
What have insiders been doing with Spectra Energy Corp. (NYSE:SE)?
Insider purchases made by high-level executives is most useful when the company in focus has experienced transactions within the past half-year. Over the last half-year time period, Spectra Energy Corp. (NYSE:SE) has experienced zero unique insiders buying, and 4 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Spectra Energy Corp. (NYSE:SE). These stocks are Oneok Partners LP (NYSE:OKS), Energy Transfer Partners LP (NYSE:ETP), Energy Transfer Equity, L.P. (NYSE:ETE), Williams Companies, Inc. (NYSE:WMB), and Plains All American Pipeline, L.P. (NYSE:PAA). This group of stocks belong to the oil & gas pipelines industry and their market caps are closest to SE’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Oneok Partners LP (NYSE:OKS)||5||1||0|
|Energy Transfer Partners LP (NYSE:ETP)||12||0||0|
|Energy Transfer Equity, L.P. (NYSE:ETE)||12||1||0|
|Williams Companies, Inc. (NYSE:WMB)||41||1||5|
|Plains All American Pipeline, L.P. (NYSE:PAA)||9||0||0|
With the results demonstrated by Insider Monkey’s tactics, retail investors should always keep an eye on hedge fund and insider trading sentiment, and Spectra Energy Corp. (NYSE:SE) is no exception.