Hedge funds are not perfect. They have their bad picks just like everyone else. Facebook, a stock hedge funds have loved dearly, lost nearly 40% of its value at one point in 2018. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 20 S&P 500 stocks among hedge funds beat the S&P 500 Index by more than 6 percentage points so far in 2019. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of Companhia Paranaense de Energia - COPEL (NYSE:ELP).
Is Companhia Paranaense de Energia - COPEL (NYSE:ELP) a buy, sell, or hold? Hedge funds are getting more bullish. The number of bullish hedge fund positions rose by 2 in recent months. Our calculations also showed that ELP isn't among the 30 most popular stocks among hedge funds. ELP was in 10 hedge funds' portfolios at the end of March. There were 8 hedge funds in our database with ELP holdings at the end of the previous quarter.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We're going to take a gander at the key hedge fund action regarding Companhia Paranaense de Energia - COPEL (NYSE:ELP).
What does smart money think about Companhia Paranaense de Energia - COPEL (NYSE:ELP)?
Heading into the second quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in ELP over the last 15 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Companhia Paranaense de Energia - COPEL (NYSE:ELP) was held by D E Shaw, which reported holding $18.3 million worth of stock at the end of March. It was followed by Arrowstreet Capital with a $12.2 million position. Other investors bullish on the company included GLG Partners, Marshall Wace LLP, and Renaissance Technologies.
As aggregate interest increased, key money managers were breaking ground themselves. AQR Capital Management, managed by Cliff Asness, assembled the largest position in Companhia Paranaense de Energia - COPEL (NYSE:ELP). AQR Capital Management had $0.4 million invested in the company at the end of the quarter. Michael Platt and William Reeves's BlueCrest Capital Mgmt. also made a $0.1 million investment in the stock during the quarter. The only other fund with a new position in the stock is David Costen Haley's HBK Investments.
Let's now review hedge fund activity in other stocks similar to Companhia Paranaense de Energia - COPEL (NYSE:ELP). We will take a look at Southwestern Energy Company (NYSE:SWN), Colliers International Group Inc (NASDAQ:CIGI), Akcea Therapeutics, Inc. (NASDAQ:AKCA), and Crestwood Equity Partners LP (NYSE:CEQP). This group of stocks' market values are similar to ELP's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SWN,24,270841,-1 CIGI,14,670696,1 AKCA,7,27613,1 CEQP,4,8137,1 Average,12.25,244322,0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $244 million. That figure was $53 million in ELP's case. Southwestern Energy Company (NYSE:SWN) is the most popular stock in this table. On the other hand Crestwood Equity Partners LP (NYSE:CEQP) is the least popular one with only 4 bullish hedge fund positions. Companhia Paranaense de Energia - COPEL (NYSE:ELP) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on ELP as the stock returned 38.1% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.