Avista Corp (NYSE:AVA) was in 10 hedge funds’ portfolio at the end of December. AVA investors should pay attention to an increase in support from the world’s most elite money managers lately. There were 9 hedge funds in our database with AVA positions at the end of the previous quarter.
According to most investors, hedge funds are seen as slow, outdated investment tools of the past. While there are over 8000 funds in operation today, we at Insider Monkey hone in on the masters of this club, close to 450 funds. Most estimates calculate that this group has its hands on the lion’s share of all hedge funds’ total capital, and by paying attention to their highest performing picks, we have unsheathed a number of investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a 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 trumped the S&P 500 index by 24 percentage points in 7 months (see the details here).
Just as integral, optimistic insider trading activity is a second way to parse down the financial markets. Just as you’d expect, there are many stimuli for a bullish insider to sell shares of his or her company, but only one, very simple reason why they would behave bullishly. Plenty of academic studies have demonstrated the market-beating potential of this method if shareholders understand where to look (learn more here).
Keeping this in mind, let’s take a gander at the recent action encompassing Avista Corp (NYSE:AVA).
Hedge fund activity in Avista Corp (NYSE:AVA)
Heading into 2013, a total of 10 of the hedge funds we track were bullish in this stock, a change of 11% from one quarter earlier. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes meaningfully.
When looking at the hedgies we track, Fisher Asset Management, managed by Ken Fisher, holds the largest position in Avista Corp (NYSE:AVA). Fisher Asset Management has a $24 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Carlson Capital, managed by Clint Carlson, which held a $12 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining hedgies that hold long positions include Israel Englander’s Millennium Management, Ken Gray and Steve Walsh’s Bryn Mawr Capital and Ken Griffin’s Citadel Investment Group.
Now, specific money managers were leading the bulls’ herd. Carlson Capital, managed by Clint Carlson, initiated the most outsized position in Avista Corp (NYSE:AVA). Carlson Capital had 12 million invested in the company at the end of the quarter. John A. Levin’s Levin Capital Strategies also initiated a $2 million position during the quarter. The other funds with new positions in the stock are Paul Tudor Jones’s Tudor Investment Corp and David Costen Haley’s HBK Investments.
Insider trading activity in Avista Corp (NYSE:AVA)
Insider purchases made by high-level executives is best served when the primary stock in question has seen transactions within the past six months. Over the latest six-month time period, Avista Corp (NYSE:AVA) has seen zero unique insiders buying, and 5 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Avista Corp (NYSE:AVA). These stocks are Otter Tail Corporation (NASDAQ:OTTR), MGE Energy, Inc. (NASDAQ:MGEE), ALLETE Inc (NYSE:ALE), PNM Resources, Inc. (NYSE:PNM), and NorthWestern Corp (NYSE:NWE). This group of stocks are in the diversified utilities industry and their market caps resemble AVA’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Otter Tail Corporation (NASDAQ:OTTR)||7||0||2|
|MGE Energy, Inc. (NASDAQ:MGEE)||6||2||0|
|ALLETE Inc (NYSE:ALE)||8||0||7|
|PNM Resources, Inc. (NYSE:PNM)||13||0||6|
|NorthWestern Corp (NYSE:NWE)||9||1||0|
With the results shown by our strategies, everyday investors should always pay attention to hedge fund and insider trading activity, and Avista Corp (NYSE:AVA) applies perfectly to this mantra.