U.S. Markets open in 35 mins

Here’s What Hedge Funds Think About Korea Electric Power Corporation (KEP)

Nina Todic

At Insider Monkey we follow nearly 750 of the best-performing investors and even though many of them lost money in the last couple of months of 2018 (some actually delivered very strong returns), the history teaches us that over the long-run they still manage to beat the market, which is why it can be profitable for us to imitate their activity. Of course, even the best money managers can sometimes get it wrong, but following some of their picks gives us a better chance to outperform the crowd than picking a random stock and this is where our research comes in.

Korea Electric Power Corporation (NYSE:KEP) has seen an increase in activity from the world's largest hedge funds lately. KEP was in 10 hedge funds' portfolios at the end of March. There were 9 hedge funds in our database with KEP positions at the end of the previous quarter. Our calculations also showed that kep isn't among the 30 most popular stocks among hedge funds.

Today there are dozens of methods market participants can use to size up their holdings. A couple of the best methods are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the best picks of the best fund managers can trounce the S&P 500 by a solid amount (see the details here).

[caption id="attachment_745225" align="aligncenter" width="473"] Noam Gottesman, GLG Partners[/caption]

Noam Gottesman GLG Partners

Let's take a glance at the key hedge fund action surrounding Korea Electric Power Corporation (NYSE:KEP).

How have hedgies been trading Korea Electric Power Corporation (NYSE:KEP)?

At the end of the first quarter, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from the previous quarter. On the other hand, there were a total of 7 hedge funds with a bullish position in KEP 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.

No of Hedge Funds with KEP Positions

When looking at the institutional investors followed by Insider Monkey, William B. Gray's Orbis Investment Management has the largest position in Korea Electric Power Corporation (NYSE:KEP), worth close to $20.3 million, accounting for 0.1% of its total 13F portfolio. The second most bullish fund manager is Ben Levine, Andrew Manuel and Stefan Renold of LMR Partners, with a $8.6 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Remaining peers that are bullish include Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, Noam Gottesman's GLG Partners and Ken Griffin's Citadel Investment Group.

As one would reasonably expect, some big names were breaking ground themselves. GLG Partners, managed by Noam Gottesman, created the most valuable position in Korea Electric Power Corporation (NYSE:KEP). GLG Partners had $0.7 million invested in the company at the end of the quarter. Ken Griffin's Citadel Investment Group also initiated a $0.5 million position during the quarter. The other funds with brand new KEP positions are Michael Gelband's ExodusPoint Capital, Israel Englander's Millennium Management, and Matthew Tewksbury's Stevens Capital Management.

Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Korea Electric Power Corporation (NYSE:KEP) but similarly valued. These stocks are Diamondback Energy Inc (NASDAQ:FANG), Tenaris S.A. (NYSE:TS), Liberty Broadband Corp (NASDAQ:LBRDK), and Liberty Broadband Corp (NASDAQ:LBRDA). This group of stocks' market caps are similar to KEP's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FANG,47,1854682,3 TS,15,775378,2 LBRDK,39,3313669,4 LBRDA,19,579556,0 Average,30,1630821,2.25 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $1631 million. That figure was $38 million in KEP's case. Diamondback Energy Inc (NASDAQ:FANG) is the most popular stock in this table. On the other hand Tenaris S.A. (NYSE:TS) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Korea Electric Power Corporation (NYSE:KEP) is even less popular than TS. Hedge funds dodged a bullet by taking a bearish stance towards KEP. Our calculations showed that the top 20 most popular hedge fund stocks returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately KEP wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); KEP investors were disappointed as the stock returned -15.5% during the same time frame and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in the second quarter.

Disclosure: None. This article was originally published at Insider Monkey.

Related Content