Hedge Funds Are Selling SunPower Corporation (SPWR)

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of September 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards SunPower Corporation (NASDAQ:SPWR).

SunPower Corporation (NASDAQ:SPWR) was in 22 hedge funds’ portfolios at the end of September. The all time high for this statistic is 25. SPWR has seen a decrease in enthusiasm from smart money recently. There were 25 hedge funds in our database with SPWR holdings at the end of June. Our calculations also showed that SPWR isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. Now let’s take a gander at the recent hedge fund action surrounding SunPower Corporation (NASDAQ:SPWR).

John Overdeck of Two Sigma Advisors

Do Hedge Funds Think SPWR Is A Good Stock To Buy Now?

At Q3’s end, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -12% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SPWR over the last 25 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

The largest stake in SunPower Corporation (NASDAQ:SPWR) was held by D E Shaw, which reported holding $89.6 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $27.4 million position. Other investors bullish on the company included Point72 Asset Management, Citadel Investment Group, and Two Sigma Advisors. In terms of the portfolio weights assigned to each position Autonomy Capital allocated the biggest weight to SunPower Corporation (NASDAQ:SPWR), around 2.11% of its 13F portfolio. Graham Capital Management is also relatively very bullish on the stock, dishing out 0.23 percent of its 13F equity portfolio to SPWR.

Because SunPower Corporation (NASDAQ:SPWR) has experienced falling interest from the entirety of the hedge funds we track, logic holds that there were a few money managers who were dropping their full holdings by the end of the third quarter. Interestingly, Scott Bessent’s Key Square Capital Management cut the largest investment of the 750 funds tracked by Insider Monkey, comprising close to $16.2 million in stock, and Mark Coe’s Intrinsic Edge Capital was right behind this move, as the fund dumped about $14.8 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 3 funds by the end of the third quarter.

Let’s also examine hedge fund activity in other stocks similar to SunPower Corporation (NASDAQ:SPWR). These stocks are VTEX (NYSE:VTEX), JBG SMITH Properties (NYSE:JBGS), Adient plc (NYSE:ADNT), Axis Capital Holdings Limited (NYSE:AXS), Casella Waste Systems Inc. (NASDAQ:CWST), Alarm.com Holdings Inc (NASDAQ:ALRM), and Leslie’s, Inc. (NASDAQ:LESL). This group of stocks’ market caps are similar to SPWR’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 21.7 hedge funds with bullish positions and the average amount invested in these stocks was $376 million. That figure was $178 million in SPWR’s case. Leslie’s, Inc. (NASDAQ:LESL) is the most popular stock in this table. On the other hand VTEX (NYSE:VTEX) is the least popular one with only 14 bullish hedge fund positions. SunPower Corporation (NASDAQ:SPWR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SPWR is 51.9. 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 positive signal but 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 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately SPWR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on SPWR were disappointed as the stock returned -8% since the end of September (through 12/31) 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 many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.