The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. What do these smart investors think about Exelon Corporation (NASDAQ:EXC)?
Is Exelon Corporation (NASDAQ:EXC) a safe stock to buy now? Investors who are in the know are in a pessimistic mood. The number of bullish hedge fund positions retreated by 3 lately. Our calculations also showed that EXC 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.
To most shareholders, hedge funds are seen as unimportant, old investment tools of yesteryear. While there are more than 8000 funds in operation at the moment, Our researchers choose to focus on the bigwigs of this club, around 850 funds. It is estimated that this group of investors direct the lion's share of the smart money's total asset base, and by tracking their inimitable picks, Insider Monkey has determined numerous investment strategies that have historically beaten the S&P 500 index. Insider Monkey's flagship short hedge fund strategy outstripped 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 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
[caption id="attachment_366432" align="aligncenter" width="399"] Jeffrey Tannenbaum of Fir Tree[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020's unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. 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. Now let's take a look at the new hedge fund action encompassing Exelon Corporation (NASDAQ:EXC).
What have hedge funds been doing with Exelon Corporation (NASDAQ:EXC)?
Heading into the second quarter of 2020, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from the previous quarter. By comparison, 33 hedge funds held shares or bullish call options in EXC a year ago. 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, Cliff Asness's AQR Capital Management has the most valuable position in Exelon Corporation (NASDAQ:EXC), worth close to $303.9 million, amounting to 0.5% of its total 13F portfolio. The second largest stake is held by John Overdeck and David Siegel of Two Sigma Advisors, with a $228.7 million position; the fund has 0.9% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors with similar optimism encompass D. E. Shaw's D E Shaw, Renaissance Technologies and Noam Gottesman's GLG Partners. In terms of the portfolio weights assigned to each position Ecofin Ltd allocated the biggest weight to Exelon Corporation (NASDAQ:EXC), around 9.5% of its 13F portfolio. Jet Capital Investors is also relatively very bullish on the stock, setting aside 7.69 percent of its 13F equity portfolio to EXC.
Because Exelon Corporation (NASDAQ:EXC) has faced falling interest from the smart money, it's easy to see that there is a sect of fund managers that elected to cut their full holdings by the end of the third quarter. At the top of the heap, Zilvinas Mecelis's Covalis Capital said goodbye to the largest stake of the 750 funds tracked by Insider Monkey, comprising an estimated $89.7 million in stock, and Jos Shaver's Electron Capital Partners was right behind this move, as the fund dropped about $82.2 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 3 funds by the end of the third quarter.
Let's now review hedge fund activity in other stocks similar to Exelon Corporation (NASDAQ:EXC). We will take a look at Koninklijke Philips NV (NYSE:PHG), Westpac Banking Corporation (NYSE:WBK), Sprint Corporation (NYSE:S), and Lam Research Corporation (NASDAQ:LRCX). All of these stocks' market caps resemble EXC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PHG,11,138924,2 WBK,9,32340,2 S,31,1437906,-4 LRCX,54,1780073,2 Average,26.25,847311,0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.25 hedge funds with bullish positions and the average amount invested in these stocks was $847 million. That figure was $1130 million in EXC's case. Lam Research Corporation (NASDAQ:LRCX) is the most popular stock in this table. On the other hand Westpac Banking Corporation (NYSE:WBK) is the least popular one with only 9 bullish hedge fund positions. Exelon Corporation (NASDAQ:EXC) 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 8.3% in 2020 through the end of May but beat the market by 13.2 percentage points. Unfortunately EXC wasn't nearly as popular as these 10 stocks and hedge funds that were betting on EXC were disappointed as the stock returned 5.2% 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.