Hedge funds are not perfect. They have their bad picks just like everyone else. Facebook, a stock hedge funds have loved, lost a third of its value since the end of July. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 30 S&P 500 stocks among hedge funds at the end of September 2018 yielded an average return of 6.7% year-to-date, vs. a gain of 2.6% for the S&P 500 Index. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of Just Energy Group, Inc. (NYSE:JE).
Is Just Energy Group, Inc. (NYSE:JE) the right pick for your portfolio? Money managers are getting more bullish. The number of bullish hedge fund positions improved by 1 recently. Our calculations also showed that JE isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? 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 market by 18 percentage points since May 2014 through December 3, 2018 (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 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s take a look at the new hedge fund action surrounding Just Energy Group, Inc. (NYSE:JE).
Hedge fund activity in Just Energy Group, Inc. (NYSE:JE)
Heading into the fourth quarter of 2018, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 9% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards JE over the last 13 quarters. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Just Energy Group, Inc. (NYSE:JE), which was worth $5 million at the end of the third quarter. On the second spot was Ardsley Partners which amassed $2.9 million worth of shares. Moreover, GLG Partners, Marshall Wace LLP, and Arrowstreet Capital were also bullish on Just Energy Group, Inc. (NYSE:JE), allocating a large percentage of their portfolios to this stock.
As industrywide interest jumped, key money managers have jumped into Just Energy Group, Inc. (NYSE:JE) headfirst. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, created the most valuable position in Just Energy Group, Inc. (NYSE:JE). Marshall Wace LLP had $1.2 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0 million investment in the stock during the quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Just Energy Group, Inc. (NYSE:JE) but similarly valued. We will take a look at Old Second Bancorp Inc. (NASDAQ:OSBC), SEACOR Marine Holdings Inc. (NYSE:SMHI), Forty Seven, Inc. (NASDAQ:FTSV), and Limoneira Company (NASDAQ:LMNR). All of these stocks’ market caps are closest to JE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OSBC | 11 | 33757 | 3 |
| SMHI | 6 | 50037 | -1 |
| FTSV | 7 | 21181 | -6 |
| LMNR | 6 | 19529 | 2 |
| Average | 7.5 | 31126 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.5 hedge funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $14 million in JE’s case. Old Second Bancorp Inc. (NASDAQ:OSBC) is the most popular stock in this table. On the other hand SEACOR Marine Holdings Inc. (NYSE:SMHI) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Just Energy Group, Inc. (NYSE:JE) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None. This article was originally published at Insider Monkey.
