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The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on March 31st. We at Insider Monkey have made an extensive database of more than 866 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Bloom Energy Corporation (NYSE:BE) based on those filings.
Bloom Energy Corporation (NYSE:BE) was in 22 hedge funds' portfolios at the end of March. The all time high for this statistic is 19. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. BE shareholders have witnessed an increase in enthusiasm from smart money of late. There were 19 hedge funds in our database with BE holdings at the end of December. Our calculations also showed that BE isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can't expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds' moves today.
Matthew Hulsizer of PEAK6 Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now let's take a peek at the key hedge fund action encompassing Bloom Energy Corporation (NYSE:BE).
Do Hedge Funds Think BE Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of 16% from the previous quarter. The graph below displays the number of hedge funds with bullish position in BE over the last 23 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in Bloom Energy Corporation (NYSE:BE), which was worth $32.2 million at the end of the fourth quarter. On the second spot was Citadel Investment Group which amassed $21.6 million worth of shares. D E Shaw, Citadel Investment Group, and GLG Partners were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Sandbar Asset Management allocated the biggest weight to Bloom Energy Corporation (NYSE:BE), around 0.75% of its 13F portfolio. Brevan Howard is also relatively very bullish on the stock, setting aside 0.28 percent of its 13F equity portfolio to BE.
As one would reasonably expect, key hedge funds were breaking ground themselves. Renaissance Technologies, initiated the biggest position in Bloom Energy Corporation (NYSE:BE). Renaissance Technologies had $32.2 million invested in the company at the end of the quarter. Matthew Hulsizer's PEAK6 Capital Management also initiated a $2.1 million position during the quarter. The other funds with new positions in the stock are Alan Howard's Brevan Howard, Thomas Bailard's Bailard Inc, and Frank Fu's CaaS Capital.
Let's now review hedge fund activity in other stocks similar to Bloom Energy Corporation (NYSE:BE). These stocks are FuelCell Energy, Inc. (NASDAQ:FCEL), Grupo Aeroportuario del Pacifico (NYSE:PAC), Turning Point Therapeutics, Inc. (NASDAQ:TPTX), PennyMac Financial Services Inc (NYSE:PFSI), Silgan Holdings Inc. (NASDAQ:SLGN), The Chemours Company (NYSE:CC), and Clean Harbors Inc (NYSE:CLH). This group of stocks' market caps are similar to BE's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FCEL,13,68015,-2 PAC,5,95131,1 TPTX,33,805626,6 PFSI,25,555644,-4 SLGN,17,246378,1 CC,27,544703,-3 CLH,27,383596,5 Average,21,385585,0.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $386 million. That figure was $109 million in BE's case. Turning Point Therapeutics, Inc. (NASDAQ:TPTX) is the most popular stock in this table. On the other hand Grupo Aeroportuario del Pacifico (NYSE:PAC) is the least popular one with only 5 bullish hedge fund positions. Bloom Energy Corporation (NYSE:BE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BE is 68.4. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and beat the market again by 7.7 percentage points. Unfortunately BE wasn't nearly as popular as these 5 stocks and hedge funds that were betting on BE were disappointed as the stock returned -25.2% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.