What’s a smart FirstEnergy Corp. (NYSE:FE) investor to do?
To many market players, hedge funds are viewed as delayed, old investment tools of an era lost to time. Although there are In excess of 8,000 hedge funds trading today, Insider Monkey looks at the crème de la crème of this club, around 525 funds. It is widely held that this group controls the lion’s share of all hedge funds’ total capital, and by tracking their best stock picks, we’ve brought to light a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outpaced 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 beaten the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).
Just as necessary, positive insider trading sentiment is another way to look at the financial markets. There are a number of incentives for an upper level exec to cut shares of his or her company, but just one, very clear reason why they would buy. Various empirical studies have demonstrated the impressive potential of this strategy if investors know where to look (learn more here).
Thus, let’s discuss the newest info surrounding FirstEnergy Corp. (NYSE:FE).
What does the smart money think about FirstEnergy Corp. (NYSE:FE)?
In preparation for the third quarter, a total of 19 of the hedge funds we track were long in this stock, a change of 19% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their stakes meaningfully.
Now, particular hedge funds were leading the bulls’ herd. First Eagle Investment Management, managed by Matt McLennan, established the most valuable position in FirstEnergy Corp. (NYSE:FE). First Eagle Investment Management had 511.9 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $39.6 million position during the quarter. The other funds with new positions in the stock are Noam Gottesman’s GLG Partners, Israel Englander’s Millennium Management, and Matthew Hulsizer’s PEAK6 Capital Management.
Insider trading activity in FirstEnergy Corp. (NYSE:FE)
Legal insider trading, particularly when it’s bullish, is most useful when the company in question has experienced transactions within the past half-year. Over the last six-month time frame, FirstEnergy Corp. (NYSE:FE) has experienced zero unique insiders purchasing, and zero 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 FirstEnergy Corp. (NYSE:FE). These stocks are PG&E Corporation (NYSE:PCG), Edison International (NYSE:EIX), PPL Corporation (NYSE:PPL), Consolidated Edison, Inc. (NYSE:ED), and Korea Electric Power Corporation (ADR) (NYSE:KEP). All of these stocks are in the electric utilities industry and their market caps resemble FE’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| PG&E Corporation (NYSE:PCG) | 16 | 0 | 0 |
| Edison International (NYSE:EIX) | 19 | 0 | 0 |
| PPL Corporation (NYSE:PPL) | 24 | 0 | 0 |
| Consolidated Edison, Inc. (NYSE:ED) | 14 | 0 | 0 |
| Korea Electric Power Corporation (ADR) (NYSE:KEP) | 8 | 0 | 0 |
Using the returns demonstrated by the previously mentioned analyses, regular investors should always pay attention to hedge fund and insider trading sentiment, and FirstEnergy Corp. (NYSE:FE) applies perfectly to this mantra.
