Is SCANA Corporation (NYSE:SCG) a buy?
Now, according to many market players, hedge funds are seen as delayed, old investment tools of an era lost to time. Although there are over 8,000 hedge funds with their doors open today, Insider Monkey looks at the elite of this group, around 525 funds. It is assumed that this group has its hands on the majority of the hedge fund industry’s total capital, and by monitoring their highest quality stock picks, we’ve determined a number of investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outstripped 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 trumped the S&P 500 index by 33 percentage points in 11 months (find the details here).
Equally as key, optimistic insider trading sentiment is another way to analyze the financial markets. There are many incentives for an insider to get rid of shares of his or her company, but just one, very simple reason why they would initiate a purchase. Many academic studies have demonstrated the impressive potential of this strategy if “monkeys” understand where to look (learn more here).
Now that that’s out of the way, we’re going to examine the recent info surrounding SCANA Corporation (NYSE:SCG).
What have hedge funds been doing with SCANA Corporation (NYSE:SCG)?
At the end of the second quarter, a total of 10 of the hedge funds we track were bullish in this stock, a change of -17% from the previous quarter. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings substantially.
Out of the hedge funds we follow, Winton Capital Management, managed by David Harding, holds the biggest position in SCANA Corporation (NYSE:SCG). Winton Capital Management has a $32.1 million position in the stock, comprising 0.4% of its 13F portfolio. The second largest stake is held by Israel Englander of Millennium Management, with a $29.4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Phill Gross and Robert Atchinson’s Adage Capital Management, Ken Griffin’s Citadel Investment Group and Steven Cohen’s SAC Capital Advisors.
Judging by the fact that SCANA Corporation (NYSE:SCG) has faced bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there were a few hedgies who sold off their entire stakes in Q1. Intriguingly, D. E. Shaw’s D E Shaw sold off the largest stake of the 450+ funds we key on, comprising an estimated $7.5 million in stock. David Costen Haley’s fund, HBK Investments, also said goodbye to its stock, about $1.1 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 2 funds in Q1.
What have insiders been doing with SCANA Corporation (NYSE:SCG)?
Legal insider trading, particularly when it’s bullish, is most useful when the primary stock in question has seen transactions within the past half-year. Over the last half-year time frame, SCANA Corporation (NYSE:SCG) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll go over the relationship between both of these indicators in other stocks similar to SCANA Corporation (NYSE:SCG). These stocks are Brookfield Infrastructure Partners L.P. (NYSE:BIP), Alliant Energy Corporation (NYSE:LNT), CMS Energy Corporation (NYSE:CMS), Pinnacle West Capital Corporation (NYSE:PNW), and OGE Energy Corp. (NYSE:OGE). This group of stocks belong to the electric utilities industry and their market caps match SCG’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Brookfield Infrastructure Partners L.P. (NYSE:BIP)||6||0||0|
|Alliant Energy Corporation (NYSE:LNT)||15||0||0|
|CMS Energy Corporation (NYSE:CMS)||20||0||0|
|Pinnacle West Capital Corporation (NYSE:PNW)||19||0||0|
|OGE Energy Corp. (NYSE:OGE)||21||0||0|
Using the returns explained by Insider Monkey’s strategies, average investors should always track hedge fund and insider trading sentiment, and SCANA Corporation (NYSE:SCG) is an important part of this process.