Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 750 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds' 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Enphase Energy Inc (NASDAQ:ENPH) in this article.
Is Enphase Energy Inc (NASDAQ:ENPH) worth your attention right now? Money managers are in a bullish mood. The number of long hedge fund positions moved up by 1 recently. Our calculations also showed that ENPH isn't among the 30 most popular stocks among hedge funds (see the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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. 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 former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, 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. Let's check out the fresh hedge fund action regarding Enphase Energy Inc (NASDAQ:ENPH).
How are hedge funds trading Enphase Energy Inc (NASDAQ:ENPH)?
At Q2's end, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 5% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in ENPH over the last 16 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Park West Asset Management, managed by Peter S. Park, holds the largest position in Enphase Energy Inc (NASDAQ:ENPH). Park West Asset Management has a $67.4 million position in the stock, comprising 2.8% of its 13F portfolio. Coming in second is Greenvale Capital, managed by Bruce Emery, which holds a $51 million position; the fund has 13.1% of its 13F portfolio invested in the stock. Remaining peers that hold long positions comprise Jos Shaver's Electron Capital Partners, Jonathan Barrett and Paul Segal's Luminus Management and Renaissance Technologies.
As aggregate interest increased, some big names have jumped into Enphase Energy Inc (NASDAQ:ENPH) headfirst. Citadel Investment Group, managed by Ken Griffin, initiated the largest position in Enphase Energy Inc (NASDAQ:ENPH). Citadel Investment Group had $12.8 million invested in the company at the end of the quarter. Kenneth Tropin's Graham Capital Management also initiated a $6.5 million position during the quarter. The other funds with brand new ENPH positions are Brad Farber's Atika Capital, Chuck Royce's Royce & Associates, and Dmitry Balyasny's Balyasny Asset Management.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Enphase Energy Inc (NASDAQ:ENPH) but similarly valued. We will take a look at United Community Banks Inc (NASDAQ:UCBI), Altra Industrial Motion Corp. (NASDAQ:AIMC), Insmed Incorporated (NASDAQ:INSM), and Korn Ferry (NYSE:KFY). This group of stocks' market valuations are closest to ENPH's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position UCBI,12,56454,-3 AIMC,14,272459,-8 INSM,23,596261,5 KFY,22,134563,1 Average,17.75,264934,-1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.75 hedge funds with bullish positions and the average amount invested in these stocks was $265 million. That figure was $299 million in ENPH's case. Insmed Incorporated (NASDAQ:INSM) is the most popular stock in this table. On the other hand United Community Banks Inc (NASDAQ:UCBI) is the least popular one with only 12 bullish hedge fund positions. Enphase Energy Inc (NASDAQ:ENPH) is not the most popular stock in this group but hedge fund interest is still above average. 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. Hedge funds were also right about betting on ENPH as the stock returned 21.9% during the third quarter and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.