As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Brookfield Renewable Partners L.P. (NYSE:BEP).
Brookfield Renewable Partners L.P. (NYSE:BEP) was in 24 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 20. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. BEP investors should be aware of an increase in enthusiasm from smart money lately. There were 20 hedge funds in our database with BEP holdings at the end of December. Our calculations also showed that BEP isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. 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 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Ryan Tolkin, CIO of Schonfeld Strategic Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery 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. 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 homepage. Keeping this in mind let’s take a peek at the latest hedge fund action surrounding Brookfield Renewable Partners L.P. (NYSE:BEP).
Do Hedge Funds Think BEP Is A Good Stock To Buy Now?
At Q1’s end, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of 20% from the previous quarter. On the other hand, there were a total of 3 hedge funds with a bullish position in BEP a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Brookfield Renewable Partners L.P. (NYSE:BEP) was held by Renaissance Technologies, which reported holding $98.1 million worth of stock at the end of December. It was followed by D E Shaw with a $34.8 million position. Other investors bullish on the company included Millennium Management, NewGen Asset Management, and Schonfeld Strategic Advisors. In terms of the portfolio weights assigned to each position NewGen Asset Management allocated the biggest weight to Brookfield Renewable Partners L.P. (NYSE:BEP), around 5.32% of its 13F portfolio. Quaero Capital is also relatively very bullish on the stock, setting aside 1.59 percent of its 13F equity portfolio to BEP.
Consequently, key money managers were breaking ground themselves. Zimmer Partners, managed by Stuart J. Zimmer, initiated the biggest position in Brookfield Renewable Partners L.P. (NYSE:BEP). Zimmer Partners had $8.3 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $5.7 million position during the quarter. The other funds with brand new BEP positions are Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Renaissance Technologies, and Rob Citrone’s Discovery Capital Management.
Let’s now review hedge fund activity in other stocks similar to Brookfield Renewable Partners L.P. (NYSE:BEP). We will take a look at Vedanta Ltd (NYSE:VEDL), Equity Lifestyle Properties, Inc. (NYSE:ELS), Black Knight, Inc. (NYSE:BKI), Invesco Ltd. (NYSE:IVZ), Erie Indemnity Company (NASDAQ:ERIE), Jack Henry & Associates, Inc. (NASDAQ:JKHY), and Nordson Corporation (NASDAQ:NDSN). This group of stocks’ market values are closest to BEP’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VEDL | 10 | 85028 | 0 |
| ELS | 29 | 620521 | 5 |
| BKI | 40 | 821783 | -4 |
| IVZ | 32 | 1240235 | -2 |
| ERIE | 12 | 61677 | 5 |
| JKHY | 20 | 197513 | -8 |
| NDSN | 26 | 179502 | 5 |
| Average | 24.1 | 458037 | 0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.1 hedge funds with bullish positions and the average amount invested in these stocks was $458 million. That figure was $223 million in BEP’s case. Black Knight, Inc. (NYSE:BKI) is the most popular stock in this table. On the other hand Vedanta Ltd (NYSE:VEDL) is the least popular one with only 10 bullish hedge fund positions. Brookfield Renewable Partners L.P. (NYSE:BEP) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BEP is 62.3. 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 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately BEP wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); BEP investors were disappointed as the stock returned -12.9% since the end of March (through 7/16) 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.
Follow Brookfield Renewable Partners L.p. (NYSE:BEP)
Follow Brookfield Renewable Partners L.p. (NYSE:BEP)
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Disclosure: None. This article was originally published at Insider Monkey.
