Is PPL Corporation (NYSE:PPL) a first-rate investment right now? The smart money is getting more bullish. The number of bullish hedge fund positions went up by 5 lately.
According to most market participants, hedge funds are perceived as worthless, old financial vehicles of years past. While there are greater than 8000 funds with their doors open at the moment, we hone in on the upper echelon of this group, around 450 funds. Most estimates calculate that this group has its hands on the lion’s share of all hedge funds’ total asset base, and by paying attention to their highest performing picks, we have unsheathed a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum 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 trumped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Just as key, bullish insider trading sentiment is a second way to parse down the investments you’re interested in. There are a variety of incentives for an upper level exec to downsize shares of his or her company, but only one, very obvious reason why they would behave bullishly. Various empirical studies have demonstrated the useful potential of this strategy if shareholders understand where to look (learn more here).
With all of this in mind, we’re going to take a look at the latest action regarding PPL Corporation (NYSE:PPL).
Hedge fund activity in PPL Corporation (NYSE:PPL)
At the end of the first quarter, a total of 23 of the hedge funds we track held long positions in this stock, a change of 28% from the first quarter. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes meaningfully.
Of the funds we track, Carlson Capital, managed by Clint Carlson, holds the largest position in PPL Corporation (NYSE:PPL). Carlson Capital has a $70.5 million position in the stock, comprising 1% of its 13F portfolio. Sitting at the No. 2 spot is Israel Englander of Millennium Management, with a $37.5 million position; 0.2% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include Glenn Russell Dubin’s Highbridge Capital Management, Matthew Hulsizer’s PEAK6 Capital Management and Cliff Asness’s AQR Capital Management.
Consequently, some big names were leading the bulls’ herd. Carlson Capital, managed by Clint Carlson, established the most outsized position in PPL Corporation (NYSE:PPL). Carlson Capital had 70.5 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also initiated a $27.4 million position during the quarter. The following funds were also among the new PPL investors: John M. Angelo and Michael L. Gordon’s Angelo Gordon & Co, William Michaelcheck’s Mariner Investment Group, and John Overdeck and David Siegel’s Two Sigma Advisors.
What have insiders been doing with PPL Corporation (NYSE:PPL)?
Bullish insider trading is particularly usable when the company in question has experienced transactions within the past six months. Over the latest half-year time period, PPL Corporation (NYSE:PPL) has experienced zero unique insiders buying, and 8 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to PPL Corporation (NYSE:PPL). These stocks are Edison International (NYSE:EIX), PG&E Corporation (NYSE:PCG), Korea Electric Power Corporation (ADR) (NYSE:KEP), FirstEnergy Corp. (NYSE:FE), and Consolidated Edison, Inc. (NYSE:ED). This group of stocks are in the electric utilities industry and their market caps resemble PPL’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Edison International (NYSE:EIX)||20||0||6|
|PG&E Corporation (NYSE:PCG)||11||0||7|
|Korea Electric Power Corporation (ADR) (NYSE:KEP)||9||0||0|
|FirstEnergy Corp. (NYSE:FE)||16||0||10|
|Consolidated Edison, Inc. (NYSE:ED)||11||1||1|
With the results exhibited by Insider Monkey’s tactics, everyday investors should always monitor hedge fund and insider trading activity, and PPL Corporation (NYSE:PPL) applies perfectly to this mantra.