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This Metric Says You Are Smart to Buy NV Energy, Inc. (NVE)

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Is NV Energy, Inc. (NYSE:NVE) a healthy stock for your portfolio? Investors who are in the know are in a bullish mood. The number of long hedge fund bets advanced by 1 in recent months.

In the eyes of most market participants, hedge funds are assumed to be underperforming, outdated financial vehicles of the past. While there are greater than 8000 funds with their doors open at the moment, we at Insider Monkey look at the masters of this club, about 450 funds. It is estimated that this group has its hands on most of the smart money’s total asset base, and by watching their top equity investments, we have deciphered a few investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year 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 23.3 percentage points in 8 months (explore the details and some picks here).

Equally as beneficial, positive insider trading activity is another way to parse down the world of equities. There are a number of reasons for an insider to drop shares of his or her company, but only one, very clear reason why they would behave bullishly. Plenty of empirical studies have demonstrated the market-beating potential of this tactic if you understand where to look (learn more here).

With all of this in mind, we’re going to take a gander at the latest action surrounding NV Energy, Inc. (NYSE:NVE).

How have hedgies been trading NV Energy, Inc. (NYSE:NVE)?

At the end of the first quarter, a total of 15 of the hedge funds we track held long positions in this stock, a change of 7% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their stakes significantly.

According to our comprehensive database, Jim Simons’s Renaissance Technologies had the biggest position in NV Energy, Inc. (NYSE:NVE), worth close to $19.9 million, accounting for less than 0.1%% of its total 13F portfolio. On Renaissance Technologies’s heels is Israel Englander of Millennium Management, with a $19.7 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Cliff Asness’s AQR Capital Management, Ken Griffin’s Citadel Investment Group and Ken Gray and Steve Walsh’s Bryn Mawr Capital.

Now, key hedge funds have been driving this bullishness. Renaissance Technologies, managed by Jim Simons, initiated the biggest position in NV Energy, Inc. (NYSE:NVE). Renaissance Technologies had 19.9 million invested in the company at the end of the quarter. Ken Gray and Steve Walsh’s Bryn Mawr Capital also made a $4.2 million investment in the stock during the quarter. The following funds were also among the new NVE investors: Glenn Russell Dubin’s Highbridge Capital Management, Steven Cohen’s SAC Capital Advisors, and Paul Tudor Jones’s Tudor Investment Corp.

What have insiders been doing with NV Energy, Inc. (NYSE:NVE)?

Insider trading activity, especially when it’s bullish, is at its handiest when the primary stock in question has experienced transactions within the past half-year. Over the last 180-day time period, NV Energy, Inc. (NYSE:NVE) has experienced zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to NV Energy, Inc. (NYSE:NVE). These stocks are Ameren Corp (NYSE:AEE), Vectren Corporation (NYSE:VVC), TransAlta Corporation (USA) (NYSE:TAC), Westar Energy Inc (NYSE:WR), and UGI Corp (NYSE:UGI). This group of stocks belong to the diversified utilities industry and their market caps are similar to NVE’s market cap.

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