Is Enel Americas S.A. (NYSE:ENIA) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is Enel Americas S.A. (NYSE:ENIA) an exceptional investment now? The smart money is taking a pessimistic view. The number of long hedge fund positions retreated by 3 recently. Our calculations also showed that ENIA isn't among the 30 most popular stocks among hedge funds (view the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 25.7% through September 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to analyze the key hedge fund action regarding Enel Americas S.A. (NYSE:ENIA).
Hedge fund activity in Enel Americas S.A. (NYSE:ENIA)
Heading into the third quarter of 2019, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of -21% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ENIA over the last 16 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey's hedge fund database, AQR Capital Management, managed by Cliff Asness, holds the number one position in Enel Americas S.A. (NYSE:ENIA). AQR Capital Management has a $69.7 million position in the stock, comprising 0.1% of its 13F portfolio. The second most bullish fund manager is Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $51.1 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism encompass Noam Gottesman's GLG Partners, Renaissance Technologies and Stuart J. Zimmer's Zimmer Partners.
Judging by the fact that Enel Americas S.A. (NYSE:ENIA) has witnessed falling interest from the aggregate hedge fund industry, logic holds that there exists a select few money managers who were dropping their full holdings by the end of the second quarter. Interestingly, Mike Vranos's Ellington dumped the biggest position of all the hedgies followed by Insider Monkey, worth an estimated $0.7 million in stock. Benjamin A. Smith's fund, Laurion Capital Management, also dumped its stock, about $0.6 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds by the end of the second quarter.
Let's go over hedge fund activity in other stocks similar to Enel Americas S.A. (NYSE:ENIA). These stocks are Weibo Corp (NASDAQ:WB), Zillow Group Inc (NASDAQ:Z), J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT), and Tradeweb Markets Inc. (NASDAQ:TW). This group of stocks' market valuations match ENIA's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position WB,16,370152,3 Z,51,1355990,18 JBHT,20,229670,-7 TW,37,489651,37 Average,31,611366,12.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 31 hedge funds with bullish positions and the average amount invested in these stocks was $611 million. That figure was $204 million in ENIA's case. Zillow Group Inc (NASDAQ:Z) is the most popular stock in this table. On the other hand Weibo Corp (NASDAQ:WB) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Enel Americas S.A. (NYSE:ENIA) is even less popular than WB. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on ENIA, though not to the same extent, as the stock returned 2.7% during the third quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.