Cleco Corporation (CNL): Are Hedge Funds Right About This Stock?

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Cleco Corporation (NYSE:CNL) has experienced a decrease in hedge fund interest of late.

Cleco Corporation (NYSE:CNL)To most stock holders, hedge funds are perceived as underperforming, outdated financial tools of years past. While there are over 8000 funds in operation at the moment, we hone in on the upper echelon of this group, close to 450 funds. Most estimates calculate that this group has its hands on the lion’s share of all hedge funds’ total asset base, and by monitoring their top picks, we have revealed a few investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy beat 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 topped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Equally as integral, bullish insider trading sentiment is another way to break down the world of equities. As the old adage goes: there are many incentives for an upper level exec to sell shares of his or her company, but just one, very simple reason why they would behave bullishly. Several academic studies have demonstrated the impressive potential of this tactic if investors understand where to look (learn more here).

With all of this in mind, we’re going to take a gander at the key action encompassing Cleco Corporation (NYSE:CNL).

How have hedgies been trading Cleco Corporation (NYSE:CNL)?

In preparation for this quarter, a total of 10 of the hedge funds we track were long in this stock, a change of 0% from the previous quarter. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their stakes substantially.

When looking at the hedgies we track, Ken Fisher’s Fisher Asset Management had the biggest position in Cleco Corporation (NYSE:CNL), worth close to $19.8 million, accounting for 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Ric Dillon of Diamond Hill Capital, with a $19.1 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include Phill Gross and Robert Atchinson’s Adage Capital Management, Jim Simons’s Renaissance Technologies and Israel Englander’s Millennium Management.

Seeing as Cleco Corporation (NYSE:CNL) has witnessed a declination in interest from hedge fund managers, it’s easy to see that there lies a certain “tier” of money managers that slashed their entire stakes last quarter. It’s worth mentioning that Matthew Tewksbury’s Stevens Capital Management dumped the biggest position of all the hedgies we monitor, valued at an estimated $1.5 million in stock. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

What have insiders been doing with Cleco Corporation (NYSE:CNL)?

Insider buying is at its handiest when the company we’re looking at has seen transactions within the past six months. Over the last six-month time period, Cleco Corporation (NYSE:CNL) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Cleco Corporation (NYSE:CNL). These stocks are Portland General Electric Company (NYSE:POR), Great Plains Energy Incorporated (NYSE:GXP), IDACORP Inc (NYSE:IDA), Hawaiian Electric Industries, Inc. (NYSE:HE), and Dynegy Inc. (NYSE:DYN). This group of stocks belong to the electric utilities industry and their market caps match CNL’s market cap.

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