The 700+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Vivint Solar Inc (NYSE:VSLR).
Vivint Solar Inc (NYSE:VSLR) shares haven't seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 11 hedge funds' portfolios at the end of September. At the end of this article we will also compare VSLR to other stocks including Carrizo Oil & Gas, Inc. (NASDAQ:CRZO), Tivity Health, Inc. (NASDAQ:TVTY), and Origin Bancorp, Inc. (NASDAQ:OBNK) to get a better sense of its popularity. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_27676" align="aligncenter" width="355"] Israel Englander of Millennium Management[/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 go over the fresh hedge fund action regarding Vivint Solar Inc (NYSE:VSLR).
How are hedge funds trading Vivint Solar Inc (NYSE:VSLR)?
At Q3's end, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the second quarter of 2019. On the other hand, there were a total of 10 hedge funds with a bullish position in VSLR a year ago. With hedgies' sentiment swirling, there exists an "upper tier" of key hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Steve Cohen's Point72 Asset Management has the biggest position in Vivint Solar Inc (NYSE:VSLR), worth close to $25.4 million, comprising 0.2% of its total 13F portfolio. On Point72 Asset Management's heels is Arosa Capital Management, managed by Till Bechtolsheimer, which holds a $16.8 million position; the fund has 3% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism include Israel Englander's Millennium Management, Bernard Lambilliotte's Ecofin Ltd and Peter Muller's PDT Partners. In terms of the portfolio weights assigned to each position Arosa Capital Management allocated the biggest weight to Vivint Solar Inc (NYSE:VSLR), around 2.99% of its 13F portfolio. Ecofin Ltd is also relatively very bullish on the stock, designating 0.76 percent of its 13F equity portfolio to VSLR.
Seeing as Vivint Solar Inc (NYSE:VSLR) has witnessed a decline in interest from the smart money, it's easy to see that there were a few hedge funds that slashed their entire stakes by the end of the third quarter. Interestingly, David E. Shaw's D E Shaw sold off the biggest position of the 750 funds watched by Insider Monkey, comprising an estimated $1.2 million in stock. Renaissance Technologies, also dropped its stock, about $0.6 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's check out hedge fund activity in other stocks similar to Vivint Solar Inc (NYSE:VSLR). These stocks are Carrizo Oil & Gas, Inc. (NASDAQ:CRZO), Tivity Health, Inc. (NASDAQ:TVTY), Origin Bancorp, Inc. (NASDAQ:OBNK), and Carolina Financial Corporation (NASDAQ:CARO). This group of stocks' market caps resemble VSLR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CRZO,16,142584,6 TVTY,19,233416,3 OBNK,6,30331,2 CARO,8,48350,0 Average,12.25,113670,2.75 [/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 $114 million. That figure was $55 million in VSLR's case. Tivity Health, Inc. (NASDAQ:TVTY) is the most popular stock in this table. On the other hand Origin Bancorp, Inc. (NASDAQ:OBNK) is the least popular one with only 6 bullish hedge fund positions. Vivint Solar Inc (NYSE:VSLR) 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 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on VSLR as the stock returned 12.4% during the first two months of Q4 and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.