Westar Energy Inc (NYSE:WR) was in 10 hedge funds’ portfolio at the end of March. WR investors should pay attention to an increase in support from the world’s most elite money managers in recent months. There were 8 hedge funds in our database with WR positions at the end of the previous quarter.
To most investors, hedge funds are assumed to be slow, old investment vehicles of yesteryear. While there are greater than 8000 funds trading at present, we at Insider Monkey hone in on the leaders of this group, around 450 funds. It is widely believed that this group controls the lion’s share of the smart money’s total asset base, and by monitoring their highest performing stock picks, we have come up with a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 outpaced the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Equally as key, bullish insider trading sentiment is a second way to break down the stock market universe. There are lots of motivations for an insider to downsize shares of his or her company, but just one, very simple reason why they would behave bullishly. Plenty of academic studies have demonstrated the market-beating potential of this tactic if “monkeys” understand what to do (learn more here).
With these “truths” under our belt, it’s important to take a look at the latest action surrounding Westar Energy Inc (NYSE:WR).
What have hedge funds been doing with Westar Energy Inc (NYSE:WR)?
In preparation for this quarter, a total of 10 of the hedge funds we track were bullish in this stock, a change of 25% from the first quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their holdings substantially.
According to our comprehensive database, Mario Gabelli’s GAMCO Investors had the largest position in Westar Energy Inc (NYSE:WR), worth close to $46.1 million, comprising 0.3% of its total 13F portfolio. On GAMCO Investors’s heels is Jim Simons of Renaissance Technologies, with a $28.7 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other hedge funds that are bullish include Ken Griffin’s Citadel Investment Group, Matthew Tewksbury’s Stevens Capital Management and Ken Gray and Steve Walsh’s Bryn Mawr Capital.
As industrywide interest jumped, key money managers have been driving this bullishness. Stevens Capital Management, managed by Matthew Tewksbury, assembled the most outsized position in Westar Energy Inc (NYSE:WR). Stevens Capital Management had 2.4 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also made a $0.7 million investment in the stock during the quarter. The only other fund with a brand new WR position is Matthew Hulsizer’s PEAK6 Capital Management.
Insider trading activity in Westar Energy Inc (NYSE:WR)
Insider trading activity, especially when it’s bullish, is at its handiest when the primary stock in question has experienced transactions within the past six months. Over the last half-year time period, Westar Energy Inc (NYSE:WR) has experienced zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Westar Energy Inc (NYSE:WR). These stocks are Ameren Corp (NYSE:AEE), Vectren Corporation (NYSE:VVC), NV Energy, Inc. (NYSE:NVE), TransAlta Corporation (USA) (NYSE:TAC), and UGI Corp (NYSE:UGI). This group of stocks are the members of the diversified utilities industry and their market caps resemble WR’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Ameren Corp (NYSE:AEE)||21||0||0|
|Vectren Corporation (NYSE:VVC)||9||0||0|
|NV Energy, Inc. (NYSE:NVE)||15||0||2|
|TransAlta Corporation (USA) (NYSE:TAC)||3||0||0|
|UGI Corp (NYSE:UGI)||11||3||4|
With the returns demonstrated by the aforementioned tactics, retail investors should always keep an eye on hedge fund and insider trading activity, and Westar Energy Inc (NYSE:WR) shareholders fit into this picture quite nicely.