Hedge Funds Are Selling Calpine Corporation (CPN)

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Calpine Corporation (NYSE:CPN).

Calpine Corporation (NYSE:CPN) was in 38 hedge funds’ portfolios at the end of September. CPN has seen a decrease in hedge fund interest recently. There were 40 hedge funds in our database with CPN holdings at the end of the previous quarter. 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 Relx PLC (ADR) (NYSE:RELX), Keysight Technologies Inc (NYSE:KEYS), and Arrow Electronics, Inc. (NYSE:ARW) to gather more data points.

According to most stock holders, hedge funds are viewed as slow, old investment tools of yesteryear. While there are over 8000 funds with their doors open at present, Our experts hone in on the crème de la crème of this club, approximately 700 funds. These hedge fund managers oversee the majority of the hedge fund industry’s total capital, and by following their best investments, Insider Monkey has determined various investment strategies that have historically outstripped the market. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points per year for a decade in their back tests.

With all of this in mind, let’s take a peek at the fresh action encompassing Calpine Corporation (NYSE:CPN).

Hedge fund activity in Calpine Corporation (NYSE:CPN)

At Q3’s end, a total of 38 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 5% from the second quarter. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Clint Carlson’s Carlson Capital has the biggest position in Calpine Corporation (NYSE:CPN), worth close to $160.7 million, accounting for 1.9% of its total 13F portfolio. On Carlson Capital’s heels is Bill Miller of Legg Mason Capital Management, with an $141.1 million position; the fund has 2.9% of its 13F portfolio invested in the stock. Remaining peers that hold long positions comprise Jonathan Barrett and Paul Segal’s Luminus Management, Peter Adam Hochfelder’s Brahman Capital and Charles Clough’s Clough Capital Partners.

Seeing as Calpine Corporation (NYSE:CPN) has witnessed bearish sentiment from hedge fund managers, it’s safe to say that there exists a select few hedge funds who were dropping their positions entirely last quarter. Interestingly, Ari Zweiman’s 683 Capital Partners dumped the biggest stake of the “upper crust” of funds monitored by Insider Monkey, totaling an estimated $54.4 million in stock, and Nehal Chopra’s Ratan Capital Group was right behind this move, as the fund dumped about $37.9 million worth of CPN shares. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 2 funds last quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Calpine Corporation (NYSE:CPN) but similarly valued. We will take a look at Relx PLC (ADR) (NYSE:RELX), Keysight Technologies Inc (NYSE:KEYS), Arrow Electronics, Inc. (NYSE:ARW), and PerkinElmer, Inc. (NYSE:PKI). All of these stocks’ market caps match CPN’s market cap.

As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $244 million. That figure was $983 million in CPN’s case. Arrow Electronics, Inc. (NYSE:ARW) is the most popular stock in this table. On the other hand Relx PLC (ADR) (NYSE:RELX) is the least popular one with only 5 bullish hedge fund positions. With 38 long hedge fund positions, Calpine Corporation (NYSE:CPN) is the superstar of this group, having also attracted the most of the hedgies’ money. 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.