Chesapeake Energy Corporation (CHK): Should You Avoid Entergy Corporation (ETR)?

Entergy Corporation (NYSE:ETR) was in 13 hedge funds’ portfolio at the end of December. ETR has experienced a decrease in activity from the world’s largest hedge funds in recent months. There were 15 hedge funds in our database with ETR holdings at the end of the previous quarter. We’ll also look at some of its key peers, like Chesapeake Energy Corporation (NYSE:CHK) and DTE Energy Co (NYSE:DTE).

In the 21st century investor’s toolkit, there are a multitude of metrics shareholders can use to analyze the equity markets. A couple of the best are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best fund managers can beat the broader indices by a superb amount (see just how much).

Entergy Corporation

Equally as integral, bullish insider trading activity is a second way to break down the stock market universe. As the old adage goes: there are plenty of reasons for an executive to sell shares of his or her company, but only one, very clear reason why they would behave bullishly. Many empirical studies have demonstrated the valuable potential of this method if piggybackers know what to do (learn more here).

With these “truths” under our belt, it’s important to take a look at the key action surrounding Entergy Corporation (NYSE:ETR).

What does the smart money think about Entergy Corporation (NYSE:ETR)?

At year’s end, a total of 13 of the hedge funds we track held long positions in this stock, a change of -13% from the third quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their stakes substantially.

When looking at the hedgies we track, First Eagle Investment Management, managed by Jean-Marie Eveillard, holds the largest position in Entergy Corporation (NYSE:ETR). First Eagle Investment Management has a $229 million position in the stock, comprising 0.8% of its 13F portfolio. On First Eagle Investment Management’s heels is Richard S. Pzena of Pzena Investment Management, with a $220 million position; the fund has 1.8% of its 13F portfolio invested in the stock. Some other hedge funds with similar optimism include Cliff Asness’s AQR Capital Management, Ken Griffin’s Citadel Investment Group and Phill Gross and Robert Atchinson’s Adage Capital Management.

Seeing as Entergy Corporation (NYSE:ETR) has faced a declination in interest from the smart money, it’s easy to see that there were a few money managers that elected to cut their full holdings at the end of the year. Intriguingly, Michael Messner’s Seminole Capital (Investment Mgmt) said goodbye to the biggest stake of the 450+ funds we key on, worth close to $40 million in stock.. Charles Clough’s fund, Clough Capital Partners, also sold off its stock, about $11 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 2 funds at the end of the year.

What have insiders been doing with Entergy Corporation (NYSE:ETR)?

Insider trading activity, especially when it’s bullish, is most useful when the primary stock in question has seen transactions within the past half-year. Over the latest 180-day time period, Entergy Corporation (NYSE:ETR) has experienced zero unique insiders buying, 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 Entergy Corporation (NYSE:ETR). These stocks are The AES Corporation (NYSE:AES), Calpine Corporation (NYSE:CPN), Wisconsin Energy Corporation (NYSE:WEC), Chesapeake Energy Corporation (NYSE:CHK), and DTE Energy Co (NYSE:DTE). This group of stocks are the members of the electric utilities industry and their market caps match ETR’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
The AES Corporation (NYSE:AES) 19 2 1
Calpine Corporation (NYSE:CPN) 22 0 0
Wisconsin Energy Corporation (NYSE:WEC) 10 1 6
Chesapeake Energy Corporation (NYSE:CHK) 38 2 2
DTE Energy Co (NYSE:DTE) 10 1 11

With the returns shown by Insider Monkey’s strategies, retail investors must always watch hedge fund and insider trading activity, and Entergy Corporation (NYSE:ETR) is no exception.

Related tickers: Entergy Corporation (NYSE:ETR), The AES Corporation (NYSE:AES), Calpine Corporation (NYSE:CPN), Wisconsin Energy Corporation (NYSE:WEC), Chesapeake Energy Corporation (NYSE:CHK), DTE Energy Co (NYSE:DTE)