Is Dominion Resources, Inc. (NYSE:D) a good investment today? Hedge funds are turning less bullish. The number of bullish hedge fund bets shrunk by 5 in recent months.
In today’s marketplace, there are many metrics market participants can use to monitor Mr. Market. A couple of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top hedge fund managers can outperform the broader indices by a superb margin (see just how much).
Just as important, optimistic insider trading activity is a second way to parse down the financial markets. Obviously, there are a variety of incentives for an insider to downsize shares of his or her company, but just one, very clear reason why they would initiate a purchase. Plenty of academic studies have demonstrated the market-beating potential of this method if piggybackers know where to look (learn more here).
Keeping this in mind, it’s important to take a peek at the recent action surrounding Dominion Resources, Inc. (NYSE:D).
What does the smart money think about Dominion Resources, Inc. (NYSE:D)?
At year’s end, a total of 11 of the hedge funds we track were long in this stock, a change of -31% from the previous quarter. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their stakes meaningfully.
When looking at the hedgies we track, Millennium Management, managed by Israel Englander, holds the biggest position in Dominion Resources, Inc. (NYSE:D). Millennium Management has a $28 million call position in the stock, comprising 0.2% of its 13F portfolio. The second largest stake is held by David Harding of Winton Capital Management, with a $19 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining hedge funds with similar optimism include Israel Englander’s Millennium Management, D. E. Shaw’s D E Shaw and Daniel S. Och’s OZ Management.
Judging by the fact that Dominion Resources, Inc. (NYSE:D) has witnessed falling interest from the aggregate hedge fund industry, it’s safe to say that there were a few hedgies that decided to sell off their entire stakes at the end of the year. At the top of the heap, Phill Gross and Robert Atchinson’s Adage Capital Management cut the largest investment of the 450+ funds we key on, totaling an estimated $43 million in stock., and Clint Carlson of Carlson Capital was right behind this move, as the fund dropped about $25 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 5 funds at the end of the year.
How are insiders trading Dominion Resources, Inc. (NYSE:D)?
Insider purchases made by high-level executives is best served when the company in focus has experienced transactions within the past six months. Over the last 180-day time period, Dominion Resources, Inc. (NYSE:D) has experienced zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Dominion Resources, Inc. (NYSE:D). These stocks are NextEra Energy, Inc. (NYSE:NEE), The Southern Company (NYSE:SO), American Electric Power Company, Inc. (NYSE:AEP), Duke Energy Corp (NYSE:DUK), and PG&E Corporation (NYSE:PCG). This group of stocks are in the electric utilities industry and their market caps are similar to D’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|NextEra Energy, Inc. (NYSE:NEE)||18||1||7|
|The Southern Company (NYSE:SO)||13||1||4|
|American Electric Power Company, Inc. (NYSE:AEP)||16||2||1|
|Duke Energy Corp (NYSE:DUK)||20||0||3|
|PG&E Corporation (NYSE:PCG)||14||0||7|
With the results exhibited by our time-tested strategies, retail investors must always watch hedge fund and insider trading activity, and Dominion Resources, Inc. (NYSE:D) applies perfectly to this mantra.
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.