ITC Holdings Corp. (NYSE:ITC) has seen an increase in support from the world’s most elite money managers recently.
If you’d ask most investors, hedge funds are seen as underperforming, outdated investment vehicles of yesteryear. While there are over 8000 funds trading today, we at Insider Monkey look at the top tier of this group, close to 450 funds. It is widely believed that this group oversees most of all hedge funds’ total asset base, and by paying attention to their best stock picks, we have brought to light a number of investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Equally as beneficial, bullish insider trading sentiment is a second way to break down the marketplace. Obviously, there are plenty of stimuli for a corporate insider to downsize shares of his or her company, but just one, very simple reason why they would initiate a purchase. Plenty of academic studies have demonstrated the market-beating potential of this tactic if “monkeys” understand what to do (learn more here).
Consequently, we’re going to take a peek at the key action regarding ITC Holdings Corp. (NYSE:ITC).
What does the smart money think about ITC Holdings Corp. (NYSE:ITC)?
Heading into Q2, a total of 14 of the hedge funds we track were long in this stock, a change of 8% from the first quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their stakes significantly.
Of the funds we track, First Eagle Investment Management, managed by Jean-Marie Eveillard, holds the most valuable position in ITC Holdings Corp. (NYSE:ITC). First Eagle Investment Management has a $70.4 million position in the stock, comprising 0.2% of its 13F portfolio. The second largest stake is held by D E Shaw, managed by D. E. Shaw, which held a $60.1 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other hedgies that hold long positions include Phill Gross and Robert Atchinson’s Adage Capital Management, Clint Carlson’s Carlson Capital and Chuck Royce’s Royce & Associates.
As one would reasonably expect, key hedge funds were breaking ground themselves. Carlson Capital, managed by Clint Carlson, initiated the most valuable position in ITC Holdings Corp. (NYSE:ITC). Carlson Capital had 29.8 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also made a $2.9 million investment in the stock during the quarter. The other funds with brand new ITC positions are D. E. Shaw’s D E Shaw and Matthew Tewksbury’s Stevens Capital Management.
What have insiders been doing with ITC Holdings Corp. (NYSE:ITC)?
Insider buying is particularly usable when the company in focus has seen transactions within the past six months. Over the last 180-day time frame, ITC Holdings Corp. (NYSE:ITC) has experienced zero unique insiders buying, and 4 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to ITC Holdings Corp. (NYSE:ITC). These stocks are Alliant Energy Corporation (NYSE:LNT), Brookfield Infrastructure Partners L.P. (NYSE:BIP), Companhia Paranaense de Energia (ADR) (NYSE:ELP), Pepco Holdings, Inc. (NYSE:POM), and Centrais Eletricas Brasileiras SA (ADR) (NYSE:EBR). This group of stocks belong to the electric utilities industry and their market caps are closest to ITC’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Alliant Energy Corporation (NYSE:LNT) | 13 | 0 | 1 |
| Brookfield Infrastructure Partners L.P. (NYSE:BIP) | 4 | 0 | 0 |
| Companhia Paranaense de Energia (ADR) (NYSE:ELP) | 6 | 0 | 0 |
| Pepco Holdings, Inc. (NYSE:POM) | 6 | 0 | 1 |
| Centrais Eletricas Brasileiras SA (ADR) (NYSE:EBR) | 10 | 0 | 0 |
With the returns demonstrated by the aforementioned studies, retail investors must always monitor hedge fund and insider trading activity, and ITC Holdings Corp. (NYSE:ITC) is an important part of this process.
