Is Consolidated Edison, Inc. (ED) Going to Burn These Hedge Funds?

Consolidated Edison, Inc. (NYSE:ED) was in 11 hedge funds’ portfolio at the end of March. ED investors should be aware of a decrease in enthusiasm from smart money in recent months. There were 17 hedge funds in our database with ED holdings at the end of the previous quarter.

In today’s marketplace, there are dozens of gauges shareholders can use to analyze their holdings. Two of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite hedge fund managers can beat the broader indices by a solid margin (see just how much).

Consolidated Edison, Inc. (NYSE:ED)Equally as key, optimistic insider trading activity is a second way to break down the stock market universe. Just as you’d expect, there are a variety of stimuli for a bullish insider to cut shares of his or her company, but only one, very simple reason why they would buy. Several empirical studies have demonstrated the impressive potential of this tactic if “monkeys” know what to do (learn more here).

With these “truths” under our belt, it’s important to take a peek at the latest action surrounding Consolidated Edison, Inc. (NYSE:ED).

What does the smart money think about Consolidated Edison, Inc. (NYSE:ED)?

At the end of the first quarter, a total of 11 of the hedge funds we track were long in this stock, a change of -35% from the first quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes substantially.

Of the funds we track, David Harding’s Winton Capital Management had the most valuable position in Consolidated Edison, Inc. (NYSE:ED), worth close to $25.8 million, accounting for 0.5% of its total 13F portfolio. On Winton Capital Management’s heels is Cliff Asness of AQR Capital Management, with a $19.3 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining hedgies that are bullish include Ken Gray and Steve Walsh’s Bryn Mawr Capital, Jim Simons’s Renaissance Technologies and John Overdeck and David Siegel’s Two Sigma Advisors.

Because Consolidated Edison, Inc. (NYSE:ED) has faced declining sentiment from the aggregate hedge fund industry, it’s easy to see that there was a specific group of hedgies that slashed their entire stakes heading into Q2. It’s worth mentioning that Clint Carlson’s Carlson Capital cut the biggest stake of the “upper crust” of funds we monitor, valued at about $34.3 million in stock., and Matthew Tewksbury of Stevens Capital Management was right behind this move, as the fund cut about $7.2 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 6 funds heading into Q2.

How have insiders been trading Consolidated Edison, Inc. (NYSE:ED)?

Insider trading activity, especially when it’s bullish, is best served when the company we’re looking at has seen transactions within the past 180 days. Over the last half-year time period, Consolidated Edison, Inc. (NYSE:ED) has experienced 1 unique insiders purchasing, and 1 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 Consolidated Edison, Inc. (NYSE:ED). These stocks are PG&E Corporation (NYSE:PCG), Edison International (NYSE:EIX), Korea Electric Power Corporation (ADR) (NYSE:KEP), PPL Corporation (NYSE:PPL), and FirstEnergy Corp. (NYSE:FE). This group of stocks belong to the electric utilities industry and their market caps match ED’s market cap.