It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 7.6% over the 12-month period ending November 21, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored mid-cap stocks by the best performing hedge funds monitored by Insider Monkey generated a return of 18% over the same time span. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in WGL Holdings Inc (NYSE:WGL).
WGL Holdings Inc (NYSE:WGL) has experienced an increase in hedge fund interest in recent months. There were 13 hedge funds in our database with WGL positions at the end of the 2016 third quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Cimpress NV (NASDAQ:CMPR), J2 Global Inc (NASDAQ:JCOM), and SLM Corp (NASDAQ:SLM) to gather more data points.
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year, involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs.
Keeping this in mind, let’s go over the fresh action encompassing WGL Holdings Inc (NYSE:WGL).
How are hedge funds trading WGL Holdings Inc (NYSE:WGL)?
At the end of the third quarter, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 8% from the previous quarter. On the other hand, there were a total of 10 hedge funds with a bullish position in WGL at the beginning of this year. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Millennium Management, led by Israel Englander, holds the most valuable position in WGL Holdings Inc (NYSE:WGL). According to regulatory filings, the fund has a $23.7 million position in the stock, comprising less than 0.1% of its 13F portfolio. On Millennium Management’s heels is AQR Capital Management, led by Cliff Asness, which holds a $21.1 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish include Jonathan Barrett and Paul Segal’s Luminus Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and D. E. Shaw’s D E Shaw. We should note that Luminus Management is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.