Here is What Hedge Funds Think About Edison International (EIX)
Is Edison International (NYSE:EIX) a good investment?
To many market players, hedge funds are viewed as bloated, outdated financial tools of a forgotten age. Although there are In excess of 8,000 hedge funds in operation currently, this site looks at the bigwigs of this group, close to 525 funds. It is widely held that this group controls the lion's share of the smart money's total capital, and by watching their highest quality picks, we've discovered a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per 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 topped the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Just as useful, optimistic insider trading sentiment is another way to analyze the world of equities. Just as you'd expect, there are many motivations for a corporate insider to downsize shares of his or her company, but only one, very simple reason why they would buy. Several academic studies have demonstrated the valuable potential of this method if "monkeys" know what to do (learn more here).
Furthermore, let's analyze the newest info surrounding Edison International (NYSE:EIX).
How are hedge funds trading Edison International (NYSE:EIX)?
Heading into Q3, a total of 19 of the hedge funds we track held long positions in this stock, a change of -5% from one quarter earlier. With hedge funds' positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their stakes substantially.
When using filings from the hedgies we track, First Eagle Investment Management, managed by Matt McLennan, holds the largest position in Edison International (NYSE:EIX). First Eagle Investment Management has a $170.9 million position in the stock, comprising 0.5% of its 13F portfolio. Sitting at the No. 2 spot is Adage Capital Management, managed by Phill Gross and Robert Atchinson, which held a $152.2 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Other hedgies that are bullish include Cliff Asness's AQR Capital Management, Glenn Russell Dubin's Highbridge Capital Management and David Harding's Winton Capital Management.
Due to the fact Edison International (NYSE:EIX) has experienced dropping sentiment from the top-tier hedge fund industry, it's easy to see that there exists a select few money managers that decided to sell off their positions entirely at the end of the second quarter. It's worth mentioning that Clint Carlson's Carlson Capital dumped the largest stake of all the hedgies we watch, worth an estimated $42.3 million in stock. John Overdeck and David Siegel's fund, Two Sigma Advisors, also dropped its stock, about $24.7 million worth. These moves are interesting, as total hedge fund interest dropped by 1 funds at the end of the second quarter.
What do corporate executives and insiders think about Edison International (NYSE:EIX)?
Insider buying made by high-level executives is most useful when the primary stock in question has seen transactions within the past six months. Over the latest 180-day time period, Edison International (NYSE:EIX) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We'll also take a look at the relationship between both of these indicators in other stocks similar to Edison International (NYSE:EIX). These stocks are PPL Corporation (NYSE:PPL), Huaneng Power International Inc (ADR) (NYSE:HNP), Consolidated Edison, Inc. (NYSE:ED), FirstEnergy Corp. (NYSE:FE), and Korea Electric Power Corporation (ADR) (NYSE:KEP). All of these stocks are in the electric utilities industry and their market caps match EIX's market cap.
# of Hedge Funds
# of Insiders Buying
# of Insiders Selling
PPL Corporation (NYSE:PPL)
Huaneng Power International Inc (ADR) (NYSE:HNP)
Consolidated Edison, Inc. (NYSE:ED)
FirstEnergy Corp. (NYSE:FE)
Korea Electric Power Corporation (ADR) (NYSE:KEP)
Using the returns shown by our studies, regular investors should always pay attention to hedge fund and insider trading sentiment, and Edison International (NYSE:EIX) is an important part of this process.