Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Bloom Energy Corporation (NYSE:BE) based on that data and determine whether they were really smart about the stock.
Bloom Energy Corporation (NYSE:BE) was in 10 hedge funds’ portfolios at the end of March. BE has experienced a decrease in support from the world’s most elite money managers lately. There were 13 hedge funds in our database with BE holdings at the end of the previous quarter. Our calculations also showed that BE isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
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. 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 58 percentage points since March 2017 (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 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Donald Sussman of Paloma Partners
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to check out the new hedge fund action encompassing Bloom Energy Corporation (NYSE:BE).
How have hedgies been trading Bloom Energy Corporation (NYSE:BE)?
At Q1’s end, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -23% from the previous quarter. On the other hand, there were a total of 9 hedge funds with a bullish position in BE a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Renaissance Technologies, holds the most valuable position in Bloom Energy Corporation (NYSE:BE). Renaissance Technologies has a $31.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Renaissance Technologies’s heels is Millennium Management, managed by Israel Englander, which holds a $5.5 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other professional money managers that hold long positions consist of Chuck Royce’s Royce & Associates, Joel Greenblatt’s Gotham Asset Management and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Royce & Associates allocated the biggest weight to Bloom Energy Corporation (NYSE:BE), around 0.06% of its 13F portfolio. PDT Partners is also relatively very bullish on the stock, dishing out 0.05 percent of its 13F equity portfolio to BE.
Due to the fact that Bloom Energy Corporation (NYSE:BE) has experienced falling interest from the entirety of the hedge funds we track, it’s easy to see that there were a few money managers who were dropping their positions entirely in the first quarter. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital sold off the largest investment of all the hedgies watched by Insider Monkey, totaling close to $2.5 million in stock. Donald Sussman’s fund, Paloma Partners, also dropped its stock, about $0.5 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 3 funds in the first quarter.
Let’s check out hedge fund activity in other stocks similar to Bloom Energy Corporation (NYSE:BE). These stocks are Cara Therapeutics Inc (NASDAQ:CARA), Simulations Plus, Inc. (NASDAQ:SLP), Intellia Therapeutics, Inc. (NASDAQ:NTLA), and Franklin Street Properties Corp. (NYSE:FSP). All of these stocks’ market caps are similar to BE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CARA | 10 | 84410 | -7 |
| SLP | 10 | 35925 | -2 |
| NTLA | 10 | 24877 | -3 |
| FSP | 5 | 30676 | -2 |
| Average | 8.75 | 43972 | -3.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.75 hedge funds with bullish positions and the average amount invested in these stocks was $44 million. That figure was $45 million in BE’s case. Cara Therapeutics Inc (NASDAQ:CARA) is the most popular stock in this table. On the other hand Franklin Street Properties Corp. (NYSE:FSP) is the least popular one with only 5 bullish hedge fund positions. Bloom Energy Corporation (NYSE:BE) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.3% in 2020 through June 30th but still beat the market by 15.5 percentage points. Hedge funds were also right about betting on BE as the stock returned 108% in Q2 and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Bloom Energy Corp (NYSE:BE)
Follow Bloom Energy Corp (NYSE:BE)
Disclosure: None. This article was originally published at Insider Monkey.
