Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of The AES Corporation (NYSE:AES) based on that data and determine whether they were really smart about the stock.
The AES Corporation (NYSE:AES) was in 47 hedge funds’ portfolios at the end of September. The all time high for this statistic is 51. AES has experienced an increase in enthusiasm from smart money of late. There were 39 hedge funds in our database with AES positions at the end of the second quarter. Our calculations also showed that AES isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now let’s take a glance at the latest hedge fund action surrounding The AES Corporation (NYSE:AES).
William Gray of Orbis Investment Management
Do Hedge Funds Think AES Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 47 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 21% from one quarter earlier. On the other hand, there were a total of 32 hedge funds with a bullish position in AES a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, William B. Gray’s Orbis Investment Management has the biggest position in The AES Corporation (NYSE:AES), worth close to $316 million, comprising 2.2% of its total 13F portfolio. The second most bullish fund manager is Electron Capital Partners, led by Jos Shaver, holding a $226.2 million position; 12% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions encompass John Smith Clark’s Southpoint Capital Advisors, Stuart J. Zimmer’s Zimmer Partners and Dan Loeb’s Third Point. In terms of the portfolio weights assigned to each position Electron Capital Partners allocated the biggest weight to The AES Corporation (NYSE:AES), around 11.96% of its 13F portfolio. SW Investment Management is also relatively very bullish on the stock, dishing out 6.81 percent of its 13F equity portfolio to AES.
Consequently, some big names have jumped into The AES Corporation (NYSE:AES) headfirst. Point72 Asset Management, managed by Steve Cohen, established the largest position in The AES Corporation (NYSE:AES). Point72 Asset Management had $27.7 million invested in the company at the end of the quarter. Franklin Parlamis’s Aequim Alternative Investments also made a $11.5 million investment in the stock during the quarter. The other funds with brand new AES positions are Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, Frank Fu’s CaaS Capital, and Andrew Weiss’s Weiss Asset Management.
Let’s also examine hedge fund activity in other stocks similar to The AES Corporation (NYSE:AES). These stocks are Incyte Corporation (NASDAQ:INCY), Arch Capital Group Ltd. (NASDAQ:ACGL), Smith & Nephew plc (NYSE:SNN), Avalara, Inc. (NYSE:AVLR), Elanco Animal Health Incorporated (NYSE:ELAN), Check Point Software Technologies Ltd. (NASDAQ:CHKP), and Doximity Inc. (NYSE:DOCS). This group of stocks’ market valuations match AES’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| INCY | 37 | 3295444 | 3 |
| ACGL | 31 | 1214570 | 9 |
| SNN | 19 | 106245 | 6 |
| AVLR | 24 | 1070703 | -5 |
| ELAN | 32 | 1850148 | -10 |
| CHKP | 30 | 621231 | 1 |
| DOCS | 19 | 554548 | 19 |
| Average | 27.4 | 1244698 | 3.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.4 hedge funds with bullish positions and the average amount invested in these stocks was $1245 million. That figure was $1481 million in AES’s case. Incyte Corporation (NASDAQ:INCY) is the most popular stock in this table. On the other hand Smith & Nephew plc (NYSE:SNN) is the least popular one with only 19 bullish hedge fund positions. Compared to these stocks The AES Corporation (NYSE:AES) is more popular among hedge funds. Our overall hedge fund sentiment score for AES is 87.6. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and still beat the market by 3.6 percentage points. Unfortunately, AES wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on AES were disappointed as the stock returned -1.6% since the end of the third quarter (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
