We are still in an overall bull market and many stocks that smart money investors were piling into surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Hedge funds' top 3 stock picks returned 41.7% this year and beat the S&P 500 ETFs by 14 percentage points. That's a big deal.This is why following the smart money sentiment is a useful tool at identifying the next stock to invest in.
Genie Energy Ltd (NYSE:GNE) was in 12 hedge funds' portfolios at the end of the third quarter of 2019. GNE shareholders have witnessed an increase in activity from the world's largest hedge funds lately. There were 10 hedge funds in our database with GNE positions at the end of the previous quarter. Our calculations also showed that GNE isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are a multitude of gauges stock market investors put to use to assess their holdings. A pair of the most innovative gauges are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the best picks of the elite money managers can trounce the S&P 500 by a superb margin (see the details here).
[caption id="attachment_26073" align="alignnone" width="600"] Jim Simons of Renaissance Technologies[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds' buy/sell signals. Let's view the recent hedge fund action surrounding Genie Energy Ltd (NYSE:GNE).
Hedge fund activity in Genie Energy Ltd (NYSE:GNE)
Heading into the fourth quarter of 2019, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 20% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards GNE over the last 17 quarters. With hedge funds' sentiment swirling, there exists an "upper tier" of notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of Genie Energy Ltd (NYSE:GNE), with a stake worth $3.9 million reported as of the end of September. Trailing Renaissance Technologies was Kahn Brothers, which amassed a stake valued at $3.5 million. AQR Capital Management, Arrowstreet Capital, and Zebra 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 Kahn Brothers allocated the biggest weight to Genie Energy Ltd (NYSE:GNE), around 0.43% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, dishing out 0.24 percent of its 13F equity portfolio to GNE.
Consequently, some big names have been driving this bullishness. AQR Capital Management, managed by Cliff Asness, created the most valuable position in Genie Energy Ltd (NYSE:GNE). AQR Capital Management had $1.9 million invested in the company at the end of the quarter. Michael Gelband's ExodusPoint Capital also made a $0.2 million investment in the stock during the quarter. The only other fund with a brand new GNE position is Donald Sussman's Paloma Partners.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Genie Energy Ltd (NYSE:GNE) but similarly valued. These stocks are Net 1 UEPS Technologies Inc (NASDAQ:UEPS), MDC Partners Inc. (NASDAQ:MDCA), Osmotica Pharmaceuticals plc (NASDAQ:OSMT), and Culp, Inc. (NYSE:CULP). All of these stocks' market caps are similar to GNE's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position UEPS,12,68838,1 MDCA,13,39751,-2 OSMT,3,950,-3 CULP,5,14536,0 Average,8.25,31019,-1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $11 million in GNE's case. MDC Partners Inc. (NASDAQ:MDCA) is the most popular stock in this table. On the other hand Osmotica Pharmaceuticals plc (NASDAQ:OSMT) is the least popular one with only 3 bullish hedge fund positions. Genie Energy Ltd (NYSE:GNE) 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 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on GNE, though not to the same extent, as the stock returned 9.4% during the first two months of the fourth quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.