Peggy Fowler, Hawaiian Electric Industries: On Monday, Peggy Fowler, Director at Hawaiian Electric Industries, Inc. (NYSE:HE) acquired about 323 shares for the Fowler Family Trust, pursuant to Stock Trading Plan executed as of Dec. 10th 2012. The consortium paid $25.185 per share, totaling an investment of roughly $8125. Their participation in the firm now adds up to $374,510, as of Tue. Oct. 1st, 4:15 PM EST.
Through this trust, Peggy Fowler now indirectly owns 14,870 shares. In addition, she directly holds 1,173 shares (both holdings Include shares acquired under the company´s Dividend Reinvestment and Stock Purchase Plan).
Fowler has been the only insider active at Hawaiian Electric for more than one year and the only buyer for more than two years, and the upside to date hasn’t been much. She has even lost money with some of her purchases, like the one made on July 2nd 2012, when she paid $28.64 for shares that are now worth $25.33 (as of Tue. Oct. 1st, 4:15 PM EST).
This proves that there is more to look at when an insider purchases stock. You usually need to consider the potential that insiders have to purchase a stock in order to fully appreciate the situation. Maybe, what has been luring Fowler despite the stock price downside is the juicy dividend that Hawaiian Electric pays out. The company yields 4.94% of the current stock price, and has a history rewarding shareholders.
Hawaiian Electric’s main hedge fund bull is Israel Englander’s Millennium Management. The fund hold $13,624,000 in stock, more than double the second largest hedge fund owner, D.E. Shaw, which holds $5,254,000 worth in stock. In both cases, the holding accounts for less than 1% of the hedge funds’ portfolios.
“Heading into Q3, a total of 11 of the hedge funds we track were long in this stock, a change of 10% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings meaningfully.” Read more here.
The question still remains. What is motivating Fowler and the hedgies to buy? Well, a combination of a high dividend yield and an industry leading return on equity of 8.5% (compared to the industry average of 3.6%) are certainly to be taken into account in the equation. Valuation at 18.2 times its earnings, compared to the 22.5x industry mean is also attractive.
Disclosure: Javier Hasse holds no position in any stocks mentioned