Now, according to many of your fellow readers, hedge funds are assumed to be delayed, old financial tools of a forgotten age. Although there are over 8,000 hedge funds trading today, Insider Monkey aim at the masters of this group, close to 525 funds. Analysts calculate that this group has its hands on the lion’s share of the smart money’s total assets, and by watching their highest quality equity investments, we’ve revealed a few investment strategies that have historically outpaced the S&P 500. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).
Just as useful, positive insider trading sentiment is a second way to look at the investments you’re interested in. As the old adage goes: there are a number of incentives for an upper level exec to get rid of shares of his or her company, but only one, very simple reason why they would buy. Many empirical studies have demonstrated the useful potential of this strategy if you understand what to do (learn more here).
Now that that’s out of the way, we’re going to examine the recent info for American Electric Power Company, Inc. (NYSE:AEP).
What have hedge funds been doing with American Electric Power Company, Inc. (NYSE:AEP)?
At the end of the second quarter, a total of 29 of the hedge funds we track were long in this stock, a change of 38% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their holdings significantly.
When using filings from the hedgies we track, Israel Englander’s Millennium Management had the biggest position in American Electric Power Company, Inc. (NYSE:AEP), worth close to $79.2 million, comprising 0.2% of its total 13F portfolio. On Millennium Management’s heels is AQR Capital Management, managed by Cliff Asness, which held a $74.3 million position; 0.3% of its 13F portfolio is allocated to the stock. Other hedge funds that hold long positions include David Harding’s Winton Capital Management, John A. Levin’s Levin Capital Strategies and Jim Simons’s Renaissance Technologies.
With a general bullishness amongst the titans, particular hedge funds have been driving this bullishness. Millennium Management, managed by Israel Englander, established the most valuable position in American Electric Power Company, Inc. (NYSE:AEP). Millennium Management had 79.2 million invested in the company at the end of the quarter. Cliff Asness’s AQR Capital Management also initiated a $74.3 million position during the quarter. The following funds were also among the new AEP investors: David Harding’s Winton Capital Management, John A. Levin’s Levin Capital Strategies, and Jim Simons’s Renaissance Technologies.
Insider trading activity in American Electric Power Company, Inc. (NYSE:AEP)
Insider buying made by high-level executives is best served when the company we’re looking at has seen transactions within the past 180 days. Over the latest 180-day time frame, American Electric Power Company, Inc. (NYSE:AEP) has seen zero unique insiders buying, 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 American Electric Power Company, Inc. (NYSE:AEP). These stocks are Korea Electric Power Corporation (ADR) (NYSE:KEP), FirstEnergy Corp. (NYSE:FE), Consolidated Edison, Inc. (NYSE:ED), PPL Corporation (NYSE:PPL), and PG&E Corporation (NYSE:PCG). This group of stocks are the members of the electric utilities industry and their market caps resemble AEP’s market cap.