Hedge Funds Are Warming Up To WEC Energy Group, Inc. (WEC)

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about WEC Energy Group, Inc. (NYSE:WEC) in this article.

Is WEC Energy Group, Inc. (NYSE:WEC) worth your attention right now? Investors who are in the know were in an optimistic mood. The number of long hedge fund bets increased by 4 in recent months. WEC Energy Group, Inc. (NYSE:WEC) was in 31 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic was previously 30. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that WEC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 27 hedge funds in our database with WEC positions at the end of the second quarter.

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. With all of this in mind we’re going to take a gander at the recent hedge fund action surrounding WEC Energy Group, Inc. (NYSE:WEC).

Joel Greenblatt of Gotham Asset Management

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

At the end of the third quarter, a total of 31 of the hedge funds tracked by Insider Monkey were long this stock, a change of 15% from one quarter earlier. On the other hand, there were a total of 22 hedge funds with a bullish position in WEC a year ago. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).

More specifically, Millennium Management was the largest shareholder of WEC Energy Group, Inc. (NYSE:WEC), with a stake worth $94.5 million reported as of the end of September. Trailing Millennium Management was AQR Capital Management, which amassed a stake valued at $57.6 million. D E Shaw, Renaissance Technologies, and Point72 Asset 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 Coann Capital allocated the biggest weight to WEC Energy Group, Inc. (NYSE:WEC), around 3.67% of its 13F portfolio. Zimmer Partners is also relatively very bullish on the stock, earmarking 0.44 percent of its 13F equity portfolio to WEC.

With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Point72 Asset Management, managed by Steve Cohen, established the largest position in WEC Energy Group, Inc. (NYSE:WEC). Point72 Asset Management had $40.2 million invested in the company at the end of the quarter. Sander Gerber’s Hudson Bay Capital Management also made a $2.5 million investment in the stock during the quarter. The following funds were also among the new WEC investors: Brad Dunkley and Blair Levinsky’s Waratah Capital Advisors, Ran Pang’s Quantamental Technologies, and Joel Greenblatt’s Gotham Asset Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as WEC Energy Group, Inc. (NYSE:WEC) but similarly valued. We will take a look at Occidental Petroleum Corporation (NYSE:OXY), Zebra Technologies Corporation (NASDAQ:ZBRA), PACCAR Inc (NASDAQ:PCAR), Delta Air Lines, Inc. (NYSE:DAL), Skyworks Solutions Inc (NASDAQ:SWKS), Bill.com Holdings, Inc. (NYSE:BILL), and Li Auto Inc. (NASDAQ:LI). This group of stocks’ market caps match WEC’s market cap.

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As you can see these stocks had an average of 42.3 hedge funds with bullish positions and the average amount invested in these stocks was $1678 million. That figure was $432 million in WEC’s case. Bill.com Holdings, Inc. (NYSE:BILL) is the most popular stock in this table. On the other hand Li Auto Inc. (NASDAQ:LI) is the least popular one with only 20 bullish hedge fund positions. WEC Energy Group, Inc. (NYSE:WEC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for WEC is 51.2. 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 WEC wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); WEC investors were disappointed as the stock returned -0.7% 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.

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