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Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the second quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of Eversource Energy (NYSE:ES) based on that data and determine whether they were really smart about the stock.
Is Eversource Energy (NYSE:ES) worth your attention right now? The best stock pickers were taking an optimistic view. The number of long hedge fund positions rose by 2 lately. Eversource Energy (NYSE:ES) was in 28 hedge funds' portfolios at the end of June. The all time high for this statistics is 26. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ES isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). There were 26 hedge funds in our database with ES holdings at the end of March.
Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most shareholders, hedge funds are assumed to be underperforming, outdated financial tools of the past. While there are over 8000 funds with their doors open at present, Our researchers choose to focus on the upper echelon of this club, about 850 funds. These money managers handle most of the hedge fund industry's total capital, and by paying attention to their matchless picks, Insider Monkey has come up with many investment strategies that have historically beaten the market. Insider Monkey's flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 34% since February 2017 (through August 17th) even though the market was up 53% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
David E. Shaw of D.E. Shaw
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. Now let's take a peek at the fresh hedge fund action encompassing Eversource Energy (NYSE:ES).
How have hedgies been trading Eversource Energy (NYSE:ES)?
At Q2's end, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 8% from one quarter earlier. By comparison, 21 hedge funds held shares or bullish call options in ES a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Zimmer Partners was the largest shareholder of Eversource Energy (NYSE:ES), with a stake worth $280.4 million reported as of the end of September. Trailing Zimmer Partners was D E Shaw, which amassed a stake valued at $48.3 million. Adage Capital Management, Citadel Investment Group, and AQR Capital Management 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 Yaupon Capital allocated the biggest weight to Eversource Energy (NYSE:ES), around 4.79% of its 13F portfolio. Blackstart Capital is also relatively very bullish on the stock, earmarking 4.23 percent of its 13F equity portfolio to ES.
With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Point72 Asset Management, managed by Steve Cohen, created the most outsized position in Eversource Energy (NYSE:ES). Point72 Asset Management had $9.6 million invested in the company at the end of the quarter. Charles Davidson and Joseph Jacobs's Wexford Capital also made a $8 million investment in the stock during the quarter. The other funds with brand new ES positions are Brian Olson, Baehyun Sung, and Jamie Waters's Blackstart Capital, Steve Pattyn's Yaupon Capital, and Matthew L Pinz's Pinz Capital.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Eversource Energy (NYSE:ES) but similarly valued. We will take a look at Capital One Financial Corp. (NYSE:COF), Amphenol Corporation (NYSE:APH), T. Rowe Price Group, Inc. (NASDAQ:TROW), IDEXX Laboratories, Inc. (NASDAQ:IDXX), Alcon Inc. (NYSE:ALC), CoStar Group Inc (NASDAQ:CSGP), and MSCI Inc (NYSE:MSCI). This group of stocks' market values match ES's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position COF,55,1908354,5 APH,42,1013347,0 TROW,34,337582,10 IDXX,40,417149,9 ALC,21,584000,-4 CSGP,50,2267394,10 MSCI,44,729558,15 Average,40.9,1036769,6.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 40.9 hedge funds with bullish positions and the average amount invested in these stocks was $1037 million. That figure was $501 million in ES's case. Capital One Financial Corp. (NYSE:COF) is the most popular stock in this table. On the other hand Alcon Inc. (NYSE:ALC) is the least popular one with only 21 bullish hedge fund positions. Eversource Energy (NYSE:ES) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ES is 47.3. 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 negative signal and 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 21.3% in 2020 through September 25th and surpassed the market by 17.7 percentage points. Unfortunately ES wasn't nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); ES investors were disappointed as the stock returned -0.3% since Q2 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 most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.