Should You Buy Cleco Corporation (CNL)?

Cleco Corporation (NYSE:CNL) was in 9 hedge funds’ portfolio at the end of December. CNL shareholders have witnessed an increase in enthusiasm from smart money of late. There were 8 hedge funds in our database with CNL positions at the end of the previous quarter.

Cleco Corporation (NYSE:CNL)

If you’d ask most stock holders, hedge funds are assumed to be worthless, old financial vehicles of yesteryear. While there are over 8000 funds with their doors open at the moment, we at Insider Monkey hone in on the aristocrats of this club, about 450 funds. It is widely believed that this group oversees the majority of the hedge fund industry’s total capital, and by watching their best investments, we have formulated a number of investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per 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 outperformed the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).

Just as beneficial, optimistic insider trading sentiment is a second way to parse down the stock market universe. There are plenty of stimuli for an executive to sell shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the useful potential of this tactic if piggybackers know where to look (learn more here).

Consequently, we’re going to take a look at the latest action regarding Cleco Corporation (NYSE:CNL).

What does the smart money think about Cleco Corporation (NYSE:CNL)?

Heading into 2013, a total of 9 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 few noteworthy hedge fund managers who were upping their holdings significantly.

According to our comprehensive database, Ken Fisher’s Fisher Asset Management had the most valuable position in Cleco Corporation (NYSE:CNL), worth close to $16.8 million, comprising less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Diamond Hill Capital, managed by Ric Dillon, which held a $16.4 million position; 0.2% of its 13F portfolio is allocated to the stock. Some other hedgies that are bullish include Israel Englander’s Millennium Management, Jim Simons’s Renaissance Technologies and Cliff Asness’s AQR Capital Management.

With a general bullishness amongst the heavyweights, some big names have jumped into Cleco Corporation (NYSE:CNL) headfirst. D E Shaw, managed by D. E. Shaw, initiated the biggest position in Cleco Corporation (NYSE:CNL). D E Shaw had 1.5 million invested in the company at the end of the quarter. David Costen Haley’s HBK Investments also initiated a $0.3 million position during the quarter.

How are insiders trading Cleco Corporation (NYSE:CNL)?

Bullish insider trading is at its handiest when the company in question has experienced transactions within the past half-year. Over the last half-year time frame, Cleco Corporation (NYSE:CNL) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Cleco Corporation (NYSE:CNL). These stocks are Portland General Electric Company (NYSE:POR), Great Plains Energy Incorporated (NYSE:GXP), IDACORP Inc (NYSE:IDA), Hawaiian Electric Industries, Inc. (NYSE:HE), and Dynegy Inc. (NYSE:DYN). This group of stocks belong to the electric utilities industry and their market caps match CNL’s market cap.