Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.
Nextera Energy Partners LP (NYSE:NEP) investors should pay attention to an increase in support from the world’s most elite money managers of late, with a net total of 1 more hedge fund owning the stock. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Colliers International Group Inc (NASDAQ:CIGI), SeaWorld Entertainment Inc (NYSE:SEAS), and CYS Investments Inc (NYSE:CYS) to gather more data points.
Follow Nextera Energy Partners Lp (NYSE:NEP)
Follow Nextera Energy Partners Lp (NYSE:NEP)
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How have hedgies been trading Nextera Energy Partners LP (NYSE:NEP)?
At Q3’s end, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 6% from the previous quarter. Hedge fund ownership has remained in a relatively narrow range over the past year, being held by between 14 and 19 hedge funds throughout that time. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Passport Capital, managed by John Burbank, holds the biggest position in Nextera Energy Partners LP (NYSE:NEP). Passport Capital has a $35.8 million position in the stock. On Passport Capital’s heels is Zimmer Partners, led by Stuart J. Zimmer, holding a $21.6 million position. Remaining hedge funds and institutional investors that are bullish consist of Bernard Lambilliotte’s Ecofin Ltd, Robert Pitts’ Steadfast Capital Management and Paul Marshall and Ian Wace’s Marshall Wace LLP.
With general bullishness amongst the heavyweights, specific money managers were leading the bulls’ herd. Balyasny Asset Management, managed by Dmitry Balyasny, initiated the most valuable position in Nextera Energy Partners LP (NYSE:NEP). Balyasny Asset Management had $7.9 million invested in the company at the end of the quarter. Robert Vollero and Gentry T. Beach’s Vollero Beach Capital Partners also initiated a $1.7 million position during the quarter. The other funds with brand new NEP positions are Charles Davidson’s Wexford Capital, David Costen Haley’s HBK Investments, and Ken Griffin’s Citadel Investment Group.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Nextera Energy Partners LP (NYSE:NEP) but similarly valued. These stocks are Colliers International Group Inc (NASDAQ:CIGI), SeaWorld Entertainment Inc (NYSE:SEAS), CYS Investments Inc (NYSE:CYS), and Guess?, Inc. (NYSE:GES). This group of stocks’ market valuations are similar to NEP’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CIGI | 10 | 109216 | -2 |
| SEAS | 14 | 105794 | -2 |
| CYS | 12 | 34791 | 4 |
| GES | 15 | 62779 | 4 |
As you can see these stocks had an average of 12.75 hedge funds with bullish positions and the average amount invested in these stocks was $78 million. That figure was $129 million in NEP’s case. Guess?, Inc. (NYSE:GES) is the most popular stock in this table. On the other hand Colliers International Group Inc (NASDAQ:CIGI) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Nextera Energy Partners LP (NYSE:NEP) 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
