Is Williams Companies, Inc. (NYSE:WMB) worth your attention right now? Hedge funds are turning less bullish. The number of bullish hedge fund bets were trimmed by 5 in recent months.
In the eyes of most market participants, hedge funds are perceived as unimportant, outdated financial tools of the past. While there are over 8000 funds in operation at the moment, we hone in on the top tier of this club, about 450 funds. Most estimates calculate that this group controls the lion’s share of the hedge fund industry’s total asset base, and by watching their highest performing equity investments, we have determined a few investment strategies that have historically outstripped the 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 started sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Equally as important, bullish insider trading sentiment is another way to parse down the world of equities. Obviously, there are plenty of stimuli for an upper level exec to cut shares of his or her company, but only one, very simple reason why they would initiate a purchase. Many academic studies have demonstrated the useful potential of this strategy if you know what to do (learn more here).
Now, let’s take a peek at the key action surrounding Williams Companies, Inc. (NYSE:WMB).
What does the smart money think about Williams Companies, Inc. (NYSE:WMB)?
At Q1’s end, a total of 41 of the hedge funds we track were long in this stock, a change of -11% from one quarter earlier.
Judging by the fact that Williams Companies, Inc. (NYSE:WMB) has faced falling interest from hedge fund managers, we can see that there lies a certain “tier” of funds that slashed their full holdings last quarter. Interestingly, Brian Jackelow’s SAB Capital Management sold off the largest position of the “upper crust” of funds we track, totaling an estimated $76.3 million in stock.. Doug Silverman and Alexander Klabin’s fund, Senator Investment Group, also sold off its call options., about $49.1 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 5 funds last quarter.
How are insiders trading Williams Companies, Inc. (NYSE:WMB)?
Bullish insider trading is best served when the primary stock in question has seen transactions within the past half-year. Over the latest six-month time period, Williams Companies, Inc. (NYSE:WMB) has seen 1 unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Williams Companies, Inc. (NYSE:WMB). These stocks are Energy Transfer Equity, L.P. (NYSE:ETE), Enbridge Inc (USA) (NYSE:ENB), Plains All American Pipeline, L.P. (NYSE:PAA), Kinder Morgan Energy Partners LP (NYSE:KMP), and Spectra Energy Corp. (NYSE:SE). This group of stocks are the members of the oil & gas pipelines industry and their market caps match WMB’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Energy Transfer Equity, L.P. (NYSE:ETE)||12||1||0|
|Enbridge Inc (USA) (NYSE:ENB)||10||0||0|
|Plains All American Pipeline, L.P. (NYSE:PAA)||11||0||3|
|Kinder Morgan Energy Partners LP (NYSE:KMP)||13||0||0|
|Spectra Energy Corp. (NYSE:SE)||20||0||5|
With the returns exhibited by Insider Monkey’s strategies, retail investors should always pay attention to hedge fund and insider trading activity, and Williams Companies, Inc. (NYSE:WMB) shareholders fit into this picture quite nicely.