Hedge funds and other investment firms that we track manage billions of dollars of their wealthy clients' money, and needless to say, they are painstakingly thorough when analyzing where to invest this money, as their own wealth also depends on it. Regardless of the various methods used by elite investors like David Tepper and David Abrams, the resources they expend are second-to-none. This is especially valuable when it comes to small-cap stocks, which is where they generate their strongest outperformance, as their resources give them a huge edge when it comes to studying these stocks compared to the average investor, which is why we intently follow their activity in the small-cap space.
Portland General Electric Company (NYSE:POR) has experienced an increase in activity from the world's largest hedge funds in recent months. POR was in 19 hedge funds' portfolios at the end of December. There were 16 hedge funds in our database with POR holdings at the end of the previous quarter. Our calculations also showed that POR isn't among the 30 most popular stocks among hedge funds.
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' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Let's take a gander at the fresh hedge fund action encompassing Portland General Electric Company (NYSE:POR).
What does the smart money think about Portland General Electric Company (NYSE:POR)?
At the end of the fourth quarter, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 19% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in POR over the last 14 quarters. With hedgies' capital changing hands, there exists a few key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Jim Simons's Renaissance Technologies has the largest position in Portland General Electric Company (NYSE:POR), worth close to $104.7 million, corresponding to 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is GLG Partners, managed by Noam Gottesman, which holds a $38.3 million position; 0.2% of its 13F portfolio is allocated to the company. Some other members of the smart money that are bullish include D. E. Shaw's D E Shaw, Israel Englander's Millennium Management and Brian Olson, Baehyun Sung, and Jamie Waters's Blackstart Capital.
Now, specific money managers were leading the bulls' herd. ExodusPoint Capital, managed by Michael Gelband, established the most outsized position in Portland General Electric Company (NYSE:POR). ExodusPoint Capital had $2.3 million invested in the company at the end of the quarter. Joel Greenblatt's Gotham Asset Management also made a $0.6 million investment in the stock during the quarter. The other funds with brand new POR positions are Hoon Kim's Quantinno Capital and Gavin Saitowitz and Cisco J. del Valle's Springbok Capital.
Let's now take a look at hedge fund activity in other stocks similar to Portland General Electric Company (NYSE:POR). We will take a look at Tesaro Inc (NASDAQ:TSRO), Gardner Denver Holdings, Inc. (NYSE:GDI), Bilibili Inc. (NASDAQ:BILI), and Syneos Health, Inc. (NASDAQ:SYNH). All of these stocks' market caps resemble POR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TSRO,39,1357819,19 GDI,27,362231,3 BILI,20,320474,4 SYNH,24,213141,-3 Average,27.5,563416,5.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.5 hedge funds with bullish positions and the average amount invested in these stocks was $563 million. That figure was $250 million in POR's case. Tesaro Inc (NASDAQ:TSRO) is the most popular stock in this table. On the other hand Bilibili Inc. (NASDAQ:BILI) is the least popular one with only 20 bullish hedge fund positions. Compared to these stocks Portland General Electric Company (NYSE:POR) is even less popular than BILI. Hedge funds dodged a bullet by taking a bearish stance towards POR. Our calculations showed that the top 15 most popular hedge fund stocks returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately POR wasn't nearly as popular as these 15 stock (hedge fund sentiment was very bearish); POR investors were disappointed as the stock returned 10% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.