You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
National Grid plc (ADR) (NYSE:NGG) has seen a decrease in support from the world’s most successful money managers recently. NGG was in 7 hedge funds’ portfolios at the end of the third quarter of 2016. There were 9 hedge funds in our database with NGG holdings at the end of the previous quarter. At the end of this article we will also compare NGG to other stocks including Occidental Petroleum Corporation (NYSE:OXY), Duke Energy Corp (NYSE:DUK), and Danaher Corporation (NYSE:DHR) to get a better sense of its popularity.
We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.
With all of this in mind, we’re going to take a look at the fresh action regarding National Grid plc (ADR) (NYSE:NGG).
How have hedgies been trading National Grid plc (ADR) (NYSE:NGG)?
Heading into the fourth quarter of 2016, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a decline of 22% from the previous quarter. By comparison, 7 hedge funds held shares or bullish call options in NGG heading into this year. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, one of the largest hedge funds in the world has the most valuable position in National Grid plc (ADR) (NYSE:NGG), worth close to $173.8 million, accounting for 0.3% of its total 13F portfolio. The second most bullish fund manager is Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $155.3 million position; 0.5% of its 13F portfolio is allocated to the stock. Other members of the smart money that hold long positions consist of Ken Griffin’s Citadel Investment Group, John Overdeck and David Siegel’s Two Sigma Advisors and Matthew Hulsizer’s PEAK6 Capital Management. We should note that none of these hedge funds are 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.