New Jersey Resources Corp (NYSE:NJR) shareholders have witnessed a decrease in hedge fund interest of late.
In the eyes of most stock holders, hedge funds are assumed to be underperforming, old financial tools of the past. While there are more than 8000 funds with their doors open at present, we look at the masters of this group, close to 450 funds. It is estimated that this group oversees the majority of the smart money’s total capital, and by paying attention to their top equity investments, we have brought to light a few investment strategies that have historically beaten the S&P 500 index. 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 began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Just as integral, bullish insider trading sentiment is another way to parse down the financial markets. Obviously, there are a number of reasons for a bullish insider to drop shares of his or her company, but just one, very simple reason why they would initiate a purchase. Many empirical studies have demonstrated the market-beating potential of this tactic if “monkeys” know where to look (learn more here).
Keeping this in mind, we’re going to take a look at the latest action encompassing New Jersey Resources Corp (NYSE:NJR).
Hedge fund activity in New Jersey Resources Corp (NYSE:NJR)
At Q1’s end, a total of 7 of the hedge funds we track were long in this stock, a change of -13% from the previous quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes meaningfully.
Of the funds we track, Citadel Investment Group, managed by Ken Griffin, holds the largest position in New Jersey Resources Corp (NYSE:NJR). Citadel Investment Group has a $3.9 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Jim Simons of Renaissance Technologies, with a $3.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include Israel Englander’s Millennium Management, Cliff Asness’s AQR Capital Management and Thomas M. Fitzgerald’s Longbow Capital Partners.
Since New Jersey Resources Corp (NYSE:NJR) has faced declining sentiment from the entirety of the hedge funds we track, logic holds that there lies a certain “tier” of hedge funds who sold off their entire stakes in Q1. At the top of the heap, Ken Gray and Steve Walsh’s Bryn Mawr Capital dumped the biggest position of the “upper crust” of funds we watch, worth close to $1.1 million in stock.. Paul Tudor Jones’s fund, Tudor Investment Corp, also dropped its stock, about $0.4 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 1 funds in Q1.
Insider trading activity in New Jersey Resources Corp (NYSE:NJR)
Insider trading activity, especially when it’s bullish, is particularly usable when the company we’re looking at has experienced transactions within the past 180 days. Over the last 180-day time period, New Jersey Resources Corp (NYSE:NJR) has seen zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to New Jersey Resources Corp (NYSE:NJR). These stocks are Piedmont Natural Gas Company, Inc. (NYSE:PNY), WGL Holdings Inc (NYSE:WGL), Atlas Energy LP (NYSE:ATLS), Southwest Gas Corporation (NYSE:SWX), and South Jersey Industries Inc (NYSE:SJI). This group of stocks are the members of the gas utilities industry and their market caps match NJR’s market cap.