Hedge Funds Are Dumping Pattern Energy Group Inc (PEGI)

The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Pattern Energy Group Inc (NASDAQ:PEGI).

Pattern Energy Group Inc (NASDAQ:PEGI) investors should be aware of a decrease in support from the world’s most elite money managers of late. At the end of this article we will also compare PEGI to other stocks including Ladder Capital Corp (NYSE:LADR), Houlihan Lokey Inc (NYSE:HLI), and Jumei International Holding Ltd (ADR) (NYSE:JMEI) to get a better sense of its popularity.

According to most shareholders, hedge funds are viewed as slow, old financial vehicles of years past. While there are greater than 8000 funds with their doors open at present, Our researchers hone in on the aristocrats of this group, approximately 700 funds. Most estimates calculate that this group of people preside over most of all hedge funds’ total asset base, and by tailing their top stock picks, Insider Monkey has found various investment strategies that have historically outperformed the broader indices. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points a year for a decade in their back tests.

Keeping this in mind, let’s view the latest action surrounding Pattern Energy Group Inc (NASDAQ:PEGI).

What does the smart money think about Pattern Energy Group Inc (NASDAQ:PEGI)?

At Q3’s end, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -19% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their holdings substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Ecofin Ltd, managed by Bernard Lambilliotte, holds the largest position in Pattern Energy Group Inc (NASDAQ:PEGI). Ecofin Ltd has a $48.6 million position in the stock, comprising 9.3% of its 13F portfolio. The second most bullish fund manager is Adage Capital Management, managed by Phill Gross and Robert Atchinson, which holds a $43 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other professional money managers with similar optimism comprise Daniel Lewis’s Orange Capital, Michael R. Weisberg’s Crestwood Capital Management and Israel Englander’s Millennium Management.

Because Pattern Energy Group Inc (NASDAQ:PEGI) has experienced bearish sentiment from the aggregate hedge fund industry, logic holds that there were a few hedgies who were dropping their entire stakes last quarter. At the top of the heap, Jos Shaver’s Electron Capital Partners said goodbye to the largest investment of the “upper crust” of funds monitored by Insider Monkey, worth an estimated $6 million in stock, and Clint Carlson’s Carlson Capital was right behind this move, as the fund dumped about $5.1 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 3 funds last quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Pattern Energy Group Inc (NASDAQ:PEGI) but similarly valued. These stocks are Ladder Capital Corp (NYSE:LADR), Houlihan Lokey Inc (NYSE:HLI), Jumei International Holding Ltd (ADR) (NYSE:JMEI), and National Beverage Corp. (NASDAQ:FIZZ). All of these stocks’ market caps are similar to PEGI’s market cap.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $49 million. Hedge funds reported stakes in PEGI with an aggregate value of $184 million. Ladder Capital Corp (NYSE:LADR) is the most popular stock in this table. On the other hand, National Beverage Corp. (NASDAQ:FIZZ) is the least popular one with only 8 bullish hedge fund positions. Pattern Energy Group Inc (NASDAQ:PEGI) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard LADR might be a better candidate to consider a long position.