Stock investors come from all walks of life. From the small retail investor to large institutional players like mutual funds and hedge funds, there is certainly a wide range of market participants.
As we've been reminded this week with the events in AMC Entertainment stock, even small retail investors can influence a stock's price if they gather enough sympathizers on social media. Putting these unprecedented short squeeze attacks aside, typically it’s the big institutional money that has the most control over stock price movements.
Here we highlight a few stocks that have caught the eye of prominent hedge fund managers—and company insiders. Together the two groups can be a powerful force behind where the stocks go from here.
Who is Buying Simon Property Group Stock?
It's been two months since a corporate insider disposed of Simon Property Group (NYSE:SPG) shares. The country's largest owner of shopping malls has seen board members filling their shopping bags with more Simon Property Group stock.
On April 23rd ten board members went on a bit of a shopping spree. Well, they acquired more Simon shares through a dividend reinvestment program tied to their stock incentive plans. These weren't outright purchases of the stock but still increase the board's stake in the company. It's unknown if taking a cash dividend is an option, but all shares count when it comes to insider ownership. Last month, the same ten directors acquired restricted stock units under the same plan that vest in a year.
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Meanwhile, hedge funds have been betting that the recovery in America's shopping centers stock is alive and well. In the first quarter, hedge fund managers added a net 238,000 shares to their portfolios. The biggest statement was made by Ken Heebner of Capital Growth Management who initiated a $23.9 million position.
Simon Property Group brought a seven-month winning streak into this month. The interest shown by insiders and hedge funds has certainly helped.
Is the Dip in Fox Stock a Buy Opportunity?
The frequency of insider trading at media conglomerate Fox Corporation (NASDAQ:FOXA) hasn't been much to talk about. In fact, only one order has been executed over the last nine months. But it was an incredibly impactful one.
Billionaire media tycoon Rupert Murdoch made a splash on March 12th when he bought more than $21 million of Fox class A stock for the K. Rupert Murdoch 2004 Revocable Trust. This brought the Chairman of the Board's indirect ownership through the trust to over 1.9 million shares.
Unfortunately for Mr. Murdoch, the purchases were made near the stock's peak in the low $40's. But with Fox shares now trading in the mid-$30's investors may want to take note of the powerful insider's purchase and the opportunity to buy for less.
Over in the hedge fund world, several managers have also been thinking Fox is undervalued. Some 1.4 million shares were added to hedge fund portfolios last quarter. This brought the group's combined holdings to approximately 30 million shares, roughly 10-times what they were two years ago.
Like other media giants, Fox has been investing heavily in its streaming services. Last week Fox News International announced that it is expanding its $6.99 per month service into Asia to bring its footprint to 37 countries.
Is Avangrid Stock a Good Clean Energy Play?
Avangrid (NYSE:AGR) is a lesser-known large cap with equally interesting insider and hedge fund activity. The Connecticut-based utility company is owned by Spanish electric utility Iberdola. Although its roots go back to the 1850's Avangrid has only traded on the public exchange since December 2015.
With the Biden administration set to advance its various 'green' initiatives, some investors are wagering that Avangrid's own clean energy investment will pay dividends. The ESG-friendly company is expected to benefit from its commitment to renewable energy—not to mention its association with global clean energy leader Iberdrola.
Speaking of the parent company, on May 13th, Iberdola pledged to invest $3.26 billion in its U.S. subsidiary through a private placement as part of Avangrid's $4 billion capital raising program. The transaction was executed on May18th at a price of $51.40. This brought Iberdola's Avangrid holding to more than 315.6 million shares, or 81.5% of the company. The rest of the shares went to the Qatar Investment Authority which now has a 3.7% stake.
Avangrid will use the money to repay a $3 billion loan from Iberdola and to fund its recently announced purchase of New Mexico-based electric company PNM Resources.
Hedge funds have been busy building their holdings in Avangrid as well. In the first quarter two firms bought the stock including high profile investor Mario Gabelli who added $24.6 million to his existing position.
Income investors will appreciate that Avangrid comes with a 3.3% dividend yield. After declining 11% last year, the stock is up 17% in 2021. If insiders and hedge funds are right, there may be more where that came from.
Companies in This Article:
|Company||Current Price||Price Change||Dividend Yield||P/E Ratio||Consensus Rating||Consensus Price Target|
|Simon Property Group (SPG)||$134.23||flat||3.87%||38.03||Hold||$118.73|