In this article we will check out the progression of hedge fund sentiment towards IDACORP Inc (NYSE:IDA) and determine whether it is a good investment 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 employ 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.
IDACORP Inc (NYSE:IDA) shares haven't seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 24 hedge funds' portfolios at the end of the first quarter of 2020. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Store Capital Corporation (NYSE:STOR), Stericycle Inc (NASDAQ:SRCL), and Life Storage, Inc. (NYSE:LSI) to gather more data points. Our calculations also showed that IDA isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.
At the moment there are tons of signals stock market investors employ to analyze publicly traded companies. A duo of the most under-the-radar signals are hedge fund and insider trading interest. We have shown that, historically, those who follow the top picks of the best money managers can outperform the broader indices by a significant amount (see the details here).
[caption id="attachment_30621" align="aligncenter" width="399"] Cliff Asness of AQR Capital Management[/caption]
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let's review the new hedge fund action regarding IDACORP Inc (NYSE:IDA).
Hedge fund activity in IDACORP Inc (NYSE:IDA)
At the end of the first quarter, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. By comparison, 18 hedge funds held shares or bullish call options in IDA a year ago. So, let's examine 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, Renaissance Technologies, holds the biggest position in IDACORP Inc (NYSE:IDA). Renaissance Technologies has a $99.7 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, led by Ken Griffin, holding a $43.4 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other peers that hold long positions comprise Cliff Asness's AQR Capital Management, D. E. Shaw's D E Shaw and Ken Fisher's Fisher Asset Management. In terms of the portfolio weights assigned to each position Brasada Capital Management allocated the biggest weight to IDACORP Inc (NYSE:IDA), around 0.44% of its 13F portfolio. Cinctive Capital Management is also relatively very bullish on the stock, setting aside 0.44 percent of its 13F equity portfolio to IDA.
Seeing as IDACORP Inc (NYSE:IDA) has experienced declining sentiment from the aggregate hedge fund industry, it's safe to say that there was a specific group of hedgies that decided to sell off their positions entirely heading into Q4. Interestingly, Mika Toikka's AlphaCrest Capital Management dropped the biggest stake of the "upper crust" of funds watched by Insider Monkey, valued at an estimated $0.9 million in stock, and Matthew Tewksbury's Stevens Capital Management was right behind this move, as the fund dropped about $0.7 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's check out hedge fund activity in other stocks similar to IDACORP Inc (NYSE:IDA). These stocks are Store Capital Corporation (NYSE:STOR), Stericycle Inc (NASDAQ:SRCL), Life Storage, Inc. (NYSE:LSI), and ONE Gas Inc (NYSE:OGS). This group of stocks' market valuations match IDA's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position STOR,25,443966,5 SRCL,20,571854,-4 LSI,22,155858,2 OGS,16,55599,0 Average,20.75,306819,0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.75 hedge funds with bullish positions and the average amount invested in these stocks was $307 million. That figure was $282 million in IDA's case. Store Capital Corporation (NYSE:STOR) is the most popular stock in this table. On the other hand ONE Gas Inc (NYSE:OGS) is the least popular one with only 16 bullish hedge fund positions. IDACORP Inc (NYSE:IDA) is not the most popular stock in this group but hedge fund interest is still above average. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but beat the market by 14.2 percentage points. Unfortunately IDA wasn't nearly as popular as these 10 stocks and hedge funds that were betting on IDA were disappointed as the stock returned 6% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.