Is Entergy Corporation (NYSE:ETR) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Entergy Corporation (NYSE:ETR) has seen a decrease in enthusiasm from smart money of late. Entergy Corporation (NYSE:ETR) was in 30 hedge funds’ portfolios at the end of September. The all time high for this statistic is 36. There were 31 hedge funds in our database with ETR holdings at the end of June. Our calculations also showed that ETR isn’t among the 30 most popular stocks among hedge funds (click for Q3 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 review the key hedge fund action surrounding Entergy Corporation (NYSE:ETR).
Stuart Zimmer of Zimmer Partners
Do Hedge Funds Think ETR Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 30 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -3% from the second quarter of 2021. By comparison, 27 hedge funds held shares or bullish call options in ETR a year ago. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
More specifically, Citadel Investment Group was the largest shareholder of Entergy Corporation (NYSE:ETR), with a stake worth $66.2 million reported as of the end of September. Trailing Citadel Investment Group was Zimmer Partners, which amassed a stake valued at $64.9 million. ExodusPoint Capital, Millennium Management, and Pzena Investment Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Zimmer Partners allocated the biggest weight to Entergy Corporation (NYSE:ETR), around 1.02% of its 13F portfolio. Huber Capital Management is also relatively very bullish on the stock, earmarking 0.8 percent of its 13F equity portfolio to ETR.
Judging by the fact that Entergy Corporation (NYSE:ETR) has experienced falling interest from the smart money, it’s easy to see that there was a specific group of funds that decided to sell off their entire stakes heading into Q4. It’s worth mentioning that Renaissance Technologies dropped the largest investment of the 750 funds followed by Insider Monkey, worth close to $12.4 million in stock, and Charles Davidson and Joseph Jacobs’s Wexford Capital was right behind this move, as the fund said goodbye to about $6.2 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 1 funds heading into Q4.
Let’s go over hedge fund activity in other stocks similar to Entergy Corporation (NYSE:ETR). These stocks are RingCentral Inc (NYSE:RNG), Darden Restaurants, Inc. (NYSE:DRI), ON Semiconductor Corporation (NASDAQ:ON), Cheniere Energy Partners LP (NYSE:CQP), Ulta Beauty, Inc. (NASDAQ:ULTA), Trip.com Group Limited (NASDAQ:TCOM), and Insulet Corporation (NASDAQ:PODD). All of these stocks’ market caps are similar to ETR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RNG | 48 | 2905250 | 1 |
| DRI | 25 | 337086 | -19 |
| ON | 41 | 1251738 | -3 |
| CQP | 3 | 10790 | 1 |
| ULTA | 42 | 935547 | 2 |
| TCOM | 36 | 1794035 | -5 |
| PODD | 32 | 1318310 | -6 |
| Average | 32.4 | 1221822 | -4.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.4 hedge funds with bullish positions and the average amount invested in these stocks was $1222 million. That figure was $283 million in ETR’s case. RingCentral Inc (NYSE:RNG) is the most popular stock in this table. On the other hand Cheniere Energy Partners LP (NYSE:CQP) is the least popular one with only 3 bullish hedge fund positions. Entergy Corporation (NYSE:ETR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ETR is 59. 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 negative signal and 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 28.6% in 2021 through November 30th and surpassed the market again by 5.6 percentage points. Unfortunately ETR wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); ETR investors were disappointed as the stock returned 2% since the end of September (through 11/30) 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 most of these stocks already outperformed the market in 2021.
Follow Entergy Corp (NYSE:ETR)
Follow Entergy Corp (NYSE:ETR)
Suggested Articles:
Disclosure: None. This article was originally published at Insider Monkey.
