Is Targa Resources Corp (NYSE:TRGP) a marvelous stock to buy now? The best stock pickers are buying. The number of bullish hedge fund positions rose by 3 lately.
If you’d ask most shareholders, hedge funds are seen as underperforming, outdated financial tools of years past. While there are greater than 8000 funds in operation at present, we choose to focus on the aristocrats of this club, about 450 funds. It is estimated that this group has its hands on the lion’s share of the hedge fund industry’s total asset base, and by tracking their top stock picks, we have deciphered a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outpaced 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 beaten the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).
Just as integral, optimistic insider trading activity is another way to break down the world of equities. As the old adage goes: there are lots of incentives for an executive to cut shares of his or her company, but only one, very clear reason why they would initiate a purchase. Many empirical studies have demonstrated the market-beating potential of this tactic if investors understand what to do (learn more here).
With all of this in mind, we’re going to take a glance at the key action encompassing Targa Resources Corp (NYSE:TRGP).
What have hedge funds been doing with Targa Resources Corp (NYSE:TRGP)?
At year’s end, a total of 11 of the hedge funds we track were long in this stock, a change of 38% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their holdings meaningfully.
According to our comprehensive database, Clint Carlson’s Carlson Capital had the most valuable position in Targa Resources Corp (NYSE:TRGP), worth close to $14 million, accounting for 0.2% of its total 13F portfolio. The second largest stake is held by Millennium Management, managed by Israel Englander, which held a $12 million position; 0.1% of its 13F portfolio is allocated to the company. Some other hedge funds with similar optimism include Jim Simons’s Renaissance Technologies, John Burbank’s Passport Capital and Phill Gross and Robert Atchinson’s Adage Capital Management.
As one would reasonably expect, key money managers were breaking ground themselves. Passport Capital, managed by John Burbank, assembled the biggest position in Targa Resources Corp (NYSE:TRGP). Passport Capital had 2 million invested in the company at the end of the quarter. Phill Gross and Robert Atchinson’s Adage Capital Management also made a $2 million investment in the stock during the quarter. The following funds were also among the new TRGP investors: J. Alan Reid, Jr.’s Forward Management and John A. Levin’s Levin Capital Strategies.
What do corporate executives and insiders think about Targa Resources Corp (NYSE:TRGP)?
Insider trading activity, especially when it’s bullish, is particularly usable when the company in focus has experienced transactions within the past 180 days. Over the latest six-month time period, Targa Resources Corp (NYSE:TRGP) has experienced zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Targa Resources Corp (NYSE:TRGP). These stocks are Atlas Energy LP (NYSE:ATLS), WGL Holdings Inc (NYSE:WGL), Piedmont Natural Gas Company, Inc. (NYSE:PNY), Suburban Propane Partners LP (NYSE:SPH), and Inergy, L.P. (NYSE:NRGY). This group of stocks are in the gas utilities industry and their market caps resemble TRGP’s market cap.
