Otter Tail Corporation (NASDAQ:OTTR) was in 7 hedge funds’ portfolio at the end of December. OTTR investors should be aware of an increase in enthusiasm from smart money in recent months. There were 4 hedge funds in our database with OTTR positions at the end of the previous quarter.
In the eyes of most shareholders, hedge funds are assumed to be slow, old investment vehicles of years past. While there are more than 8000 funds in operation today, we at Insider Monkey hone in on the moguls of this club, close to 450 funds. It is estimated that this group controls most of the hedge fund industry’s total capital, and by tracking their top equity investments, we have identified a number of investment strategies that have historically outstripped the 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 started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 24 percentage points in 7 months (see the details here).
Just as beneficial, positive insider trading sentiment is another way to parse down the marketplace. Obviously, there are plenty of motivations for an upper level exec to sell shares of his or her company, but only one, very clear reason why they would buy. Several academic studies have demonstrated the market-beating potential of this tactic if you know where to look (learn more here).
With these “truths” under our belt, we’re going to take a look at the latest action surrounding Otter Tail Corporation (NASDAQ:OTTR).
Hedge fund activity in Otter Tail Corporation (NASDAQ:OTTR)
Heading into 2013, a total of 7 of the hedge funds we track were bullish in this stock, a change of 75% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes substantially.
When looking at the hedgies we track, GAMCO Investors, managed by Mario Gabelli, holds the most valuable position in Otter Tail Corporation (NASDAQ:OTTR). GAMCO Investors has a $7.5 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by AQR Capital Management, managed by Cliff Asness, which held a $4.7 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining hedge funds with similar optimism include Joel Greenblatt’s Gotham Asset Management, Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group.
As aggregate interest increased, key money managers were breaking ground themselves. Gotham Asset Management, managed by Joel Greenblatt, assembled the largest position in Otter Tail Corporation (NASDAQ:OTTR). Gotham Asset Management had 1.6 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $0.6 million position during the quarter. The other funds with new positions in the stock are Mike Vranos’s Ellington and Ken Griffin’s Citadel Investment Group.
How are insiders trading Otter Tail Corporation (NASDAQ:OTTR)?
Bullish insider trading is most useful when the company in question has experienced transactions within the past six months. Over the latest half-year time period, Otter Tail Corporation (NASDAQ:OTTR) has seen zero unique insiders buying, and 2 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Otter Tail Corporation (NASDAQ:OTTR). These stocks are Avista Corp (NYSE:AVA), NorthWestern Corp (NYSE:NWE), Just Energy Group, Inc. Ordinary Shares (Canada) (NYSE:JE), CH Energy Group Inc (NYSE:CHG), and MGE Energy, Inc. (NASDAQ:MGEE). This group of stocks are the members of the diversified utilities industry and their market caps resemble OTTR’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Avista Corp (NYSE:AVA)||10||0||5|
|NorthWestern Corp (NYSE:NWE)||9||1||0|
|Just Energy Group, Inc. Ordinary Shares (Canada) (NYSE:JE)||2||0||0|
|CH Energy Group Inc (NYSE:CHG)||5||0||0|
|MGE Energy, Inc. (NASDAQ:MGEE)||6||2||0|
With the results exhibited by the aforementioned research, retail investors should always monitor hedge fund and insider trading sentiment, and Otter Tail Corporation (NASDAQ:OTTR) applies perfectly to this mantra.