With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the first quarter. One of these stocks was Xcel Energy Inc (NASDAQ:XEL).
Xcel Energy Inc (NASDAQ:XEL) shareholders have witnessed a decrease in support from the world's most elite money managers lately. Our calculations also showed that XEL isn't among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of indicators investors can use to grade stocks. A duo of the most under-the-radar indicators are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the best money managers can trounce the broader indices by a very impressive amount (see the details here).
Let's take a glance at the new hedge fund action surrounding Xcel Energy Inc (NASDAQ:XEL).
How are hedge funds trading Xcel Energy Inc (NASDAQ:XEL)?
At Q1's end, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -24% from the fourth quarter of 2018. By comparison, 21 hedge funds held shares or bullish call options in XEL a year ago. With the smart money's sentiment swirling, there exists a few key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
The largest stake in Xcel Energy Inc (NASDAQ:XEL) was held by Renaissance Technologies, which reported holding $275.4 million worth of stock at the end of March. It was followed by AQR Capital Management with a $68.2 million position. Other investors bullish on the company included Winton Capital Management, Carlson Capital, and Millennium Management.
Seeing as Xcel Energy Inc (NASDAQ:XEL) has faced declining sentiment from hedge fund managers, it's easy to see that there was a specific group of hedge funds that elected to cut their entire stakes last quarter. At the top of the heap, John A. Levin's Levin Capital Strategies cut the biggest stake of the 700 funds tracked by Insider Monkey, comprising an estimated $44.7 million in stock. Sara Nainzadeh's fund, Centenus Global Management, also dropped its stock, about $17.7 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 5 funds last quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Xcel Energy Inc (NASDAQ:XEL) but similarly valued. We will take a look at Canadian Pacific Railway Limited (NYSE:CP), Paychex, Inc. (NASDAQ:PAYX), ONEOK, Inc. (NYSE:OKE), and Baker Hughes, a GE company (NYSE:BHGE). All of these stocks' market caps match XEL's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CP,30,1974726,-10 PAYX,21,808401,-9 OKE,14,278924,-12 BHGE,23,415986,-5 Average,22,869509,-9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $870 million. That figure was $527 million in XEL's case. Canadian Pacific Railway Limited (NYSE:CP) is the most popular stock in this table. On the other hand ONEOK, Inc. (NYSE:OKE) is the least popular one with only 14 bullish hedge fund positions. Xcel Energy Inc (NASDAQ:XEL) 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 XEL as the stock returned 8.9% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.