Where Do Hedge Funds Stand On Bloom Energy (BE)
In this article we will take a look at whether hedge funds think Bloom Energy Corporation (NYSE:BE) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Bloom Energy Corporation (NYSE:BE) has seen an increase in support from the world's most elite money managers in recent months. Bloom Energy Corporation (NYSE:BE) was in 17 hedge funds' portfolios at the end of September. The all time high for this statistic is 16. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BE isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: 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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (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 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Louis Bacon Moore of Moore Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind we're going to take a glance at the fresh hedge fund action encompassing Bloom Energy Corporation (NYSE:BE).
Do Hedge Funds Think BE Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from the previous quarter. The graph below displays the number of hedge funds with bullish position in BE over the last 21 quarters. With hedge funds' sentiment swirling, there exists an "upper tier" of notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of Bloom Energy Corporation (NYSE:BE), with a stake worth $66.6 million reported as of the end of September. Trailing Renaissance Technologies was D E Shaw, which amassed a stake valued at $50.6 million. Driehaus Capital, Royce & Associates, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position PDT Partners allocated the biggest weight to Bloom Energy Corporation (NYSE:BE), around 0.47% of its 13F portfolio. Driehaus Capital is also relatively very bullish on the stock, designating 0.31 percent of its 13F equity portfolio to BE.
Now, specific money managers have been driving this bullishness. Driehaus Capital, managed by Richard Driehaus, assembled the largest position in Bloom Energy Corporation (NYSE:BE). Driehaus Capital had $15.3 million invested in the company at the end of the quarter. Ken Griffin's Citadel Investment Group also initiated a $4.4 million position during the quarter. The other funds with new positions in the stock are Louis Bacon's Moore Global Investments, Steve Cohen's Point72 Asset Management, and Cliff Asness's AQR Capital Management.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Bloom Energy Corporation (NYSE:BE) but similarly valued. We will take a look at Uniti Group Inc. (NASDAQ:UNIT), Itron, Inc. (NASDAQ:ITRI), Sensient Technologies Corporation (NYSE:SXT), ABM Industries, Inc. (NYSE:ABM), CarGurus, Inc. (NASDAQ:CARG), Stepan Company (NYSE:SCL), and Echostar Corporation (NASDAQ:SATS). This group of stocks' market values are similar to BE's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position UNIT,22,351956,5 ITRI,15,276452,2 SXT,22,219122,-1 ABM,18,48485,-3 CARG,32,328264,1 SCL,12,46672,-3 SATS,28,346080,-1 Average,21.3,231004,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.3 hedge funds with bullish positions and the average amount invested in these stocks was $231 million. That figure was $176 million in BE's case. CarGurus, Inc. (NASDAQ:CARG) is the most popular stock in this table. On the other hand Stepan Company (NYSE:SCL) is the least popular one with only 12 bullish hedge fund positions. Bloom Energy Corporation (NYSE:BE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BE is 48.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on BE as the stock returned 35.4% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
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