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We track corporate insiders because we think they have an edge over ordinary investors. Academic research has shown that insider purchases on average outperform the market in the following 12 months. The reason is simple. Insiders always have big exposure to their companies' performance. They will only increase their exposure when they know that their purchases have great probability of being profitable. They usually postpone their purchases if they know that negative information about their companies is about to be released.

In this article we will focus on the utility stocks insiders are bullish about. All companies have at least a $2 billion market cap and were purchased by at least one insider during the past three months. The market data is sourced from Finviz.

Ticker

Company

Insiders

ED

Consolidated Edison Inc.

10

HE

Hawaiian Electric Industries

1

NRGY

Inergy, L.P.

2

UGI

UGI Corp.

2

EQT

EQT Corporation

3

D

Dominion Resources, Inc.

1

NVE

NV Energy, Inc.

1

POM

Pepco Holdings, Inc.

1

SCG

SCANA Corp.

1

WR

Westar Energy, Inc.

1

Consolidated Edison Inc (NYSE:ED) was bought by most insiders over the past three months. The stock was bought by ten insiders at the end of December last year. On December 31, ten officers/and directors of the company, including Robert Hoglund, Joann Ryan, and Frances Resheske bought about 500 shares of ED at $59.47. Now ED is trading at $58.84 per share. There are 13 hedge funds disclosed to own ED at the end of September. Among them, Jim Simons' Renaissance Technologies had the largest ED position. The fund had nearly $100 million invested in this stock at the end of the third quarter.

EQT Corporation (NYSE:EQT) was also purchased by three insiders during the past month. On January 3, James Rohr, Bray Cary and Philip Behrman bought 730 shares, 770 shares and 330 shares of EQT respectively at prices ranging from $53.36 to $54.79. Now EQT is trading at $48.7 per share. Rohr, Cary and Behrman also purchased hundreds of shares of the stock last year at prices ranging from $44.84 to $53.56. At the end of the third quarter, there are 24 hedge funds with EQT positions. For instance, Steven Cohen's SAC Capital Advisors had $45 million invested in EQT at the end of September, up 1165% from the end of June.

Another large-cap stock with insider purchases during the past three months is Dominion Resources Inc (NYSE:D). On December 5, William Barr purchased nearly 1000 shares at $51.0332 per share. Today D is trading at $50.43 per share. It has a market cap of $29B and a P/E ratio of 19.44. There are 13 hedge funds with D positions in their portfolios at the end of the third quarter. Jim Simons' Renaissance Technologies invested $36 million in this stock. Charles Clough and Israel Englander are also bullish about D. Their funds both invested more than $15 million in D at the end of September.

Other utilities stocks that insiders are bullish about include Hawaiian Electric Industries Inc (NYSE:HE), Inergy LP (NRGY), UGI Corp (NYSE:UGI), NV Energy Inc (NYSE:NVE), Pepco Holdings Inc (NYSE:POM), SCANA Corp (NYSE:SCG), and Westar Energy Inc (NYSE:WR). Our past studies have shown that investors can beat the market in the long term simply by imitating the stock picks of corporate insiders. We encourage investors to do some in-depth research on the stocks that insiders are buying, and consider adding some of them to their own portfolios.

Source: 10 Utility Stocks Insiders Are Bullish About