Do Hedge Funds Love Public Service Enterprise Group Incorporated (PEG)?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 867 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2021. In this article we are going to take a look at smart money sentiment towards Public Service Enterprise Group Incorporated (NYSE:PEG).

Public Service Enterprise Group Incorporated (NYSE:PEG) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 26 hedge funds’ portfolios at the end of September. Our calculations also showed that PEG isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). At the end of this article we will also compare PEG to other stocks including Suncor Energy Inc. (NYSE:SU), Arthur J. Gallagher & Co. (NYSE:AJG), and American Water Works Company, Inc. (NYSE:AWK) to get a better sense of its popularity.

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 look at the key hedge fund action encompassing Public Service Enterprise Group Incorporated (NYSE:PEG).

Phillip Gross of Adage Capital

Do Hedge Funds Think PEG Is A Good Stock To Buy Now?

At the end of the third quarter, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. By comparison, 23 hedge funds held shares or bullish call options in PEG a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Citadel Investment Group was the largest shareholder of Public Service Enterprise Group Incorporated (NYSE:PEG), with a stake worth $126.8 million reported as of the end of September. Trailing Citadel Investment Group was Zimmer Partners, which amassed a stake valued at $121.8 million. Adage Capital Management, AQR Capital Management, 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 Coann Capital allocated the biggest weight to Public Service Enterprise Group Incorporated (NYSE:PEG), around 7.85% of its 13F portfolio. Covalis Capital is also relatively very bullish on the stock, designating 3.14 percent of its 13F equity portfolio to PEG.

Judging by the fact that Public Service Enterprise Group Incorporated (NYSE:PEG) has faced falling interest from the smart money, logic holds that there were a few hedgies who were dropping their full holdings by the end of the third quarter. It’s worth mentioning that Paul Marshall and Ian Wace’s Marshall Wace LLP dropped the biggest investment of the 750 funds watched by Insider Monkey, worth an estimated $25.6 million in stock, and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors was right behind this move, as the fund dumped about $19.6 million worth. These bearish behaviors are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Public Service Enterprise Group Incorporated (NYSE:PEG) but similarly valued. We will take a look at Suncor Energy Inc. (NYSE:SU), Arthur J. Gallagher & Co. (NYSE:AJG), American Water Works Company, Inc. (NYSE:AWK), Nokia Corporation (NYSE:NOK), Phillips 66 (NYSE:PSX), Liberty Broadband Corp (NASDAQ:LBRDA), and Zimmer Biomet Holdings Inc (NYSE:ZBH). This group of stocks’ market valuations are closest to PEG’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 31.3 hedge funds with bullish positions and the average amount invested in these stocks was $993 million. That figure was $519 million in PEG’s case. Zimmer Biomet Holdings Inc (NYSE:ZBH) is the most popular stock in this table. On the other hand Nokia Corporation (NYSE:NOK) is the least popular one with only 22 bullish hedge fund positions. Public Service Enterprise Group Incorporated (NYSE:PEG) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PEG is 35.9. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 31.1% in 2021 through December 9th and surpassed the market again by 5.1 percentage points. Unfortunately PEG wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); PEG investors were disappointed as the stock returned 5.5% since the end of September (through 12/9) 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 most of these stocks already outperformed the market in 2021.

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Disclosure: None. This article was originally published at Insider Monkey.