It’s a little-known fact that stock performance is not evenly distributed (i.e. you don’t have a 50/50 chance of picking a market-beating stock). In fact, despite the S&P 500 gaining about 5.2% between November 1, 2014 and October 30, 2015, less than 49% of the stocks in the index beat the market during that time. In contrast, the 30 stocks from the index which were the most popular among the investors that we track returned 9.5% during that time and 63% of them beat the market. This shows that while hedge funds get a lot of flak from the mainstream media for their performance, it can be rewarding to follow their moves using the right sets of data. Even then, there is never a fool proof strategy to generating returns, as even the collective wisdom of top hedge funds gets it wrong some times, as in the case of some of their top picks from the index like Micron and Anadarko. The data though, shows that following the collective wisdom of select hedge funds can be a very wise move overall.
IDACORP Inc (NYSE:IDA) has experienced a decrease in activity from the world’s largest hedge funds lately. IDACORP Inc (NYSE:IDA) was in 11 hedge funds’ portfolios at the end of September. There were 14 hedge funds in our database with IDACORP Inc (NYSE:IDA) positions at the end of the previous quarter. For investors who are in the know, the hedge fund sentiment could be surprising, considering an increase of 15.27% in the shares of IDACORP Inc (NYSE:IDA). In order to find out more about the hedge fund behavior, we will discuss hedge funds that had positions in the company, 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 Apple Hospitality REIT Inc (NYSE:APLE), Post Holdings Inc (NYSE:POST), and Sprouts Farmers Market Inc (NASDAQ:SFM) to gather more data points.
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To the average investor, there are several gauges investors can use to size up publicly traded companies. A duo of the most useful gauges are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the best picks of the elite fund managers can outclass their index-focused peers by a healthy margin (see the details here).
With all of this in mind, we’re going to review the latest action surrounding IDACORP Inc (NYSE:IDA).
How have hedgies been trading IDACORP Inc (NYSE:IDA)?
At the end of the third quarter, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a decline of 21% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Fisher Asset Management, managed by Ken Fisher, holds the largest position in IDACORP Inc (NYSE:IDA). Fisher Asset Management has a $38.7 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by AQR Capital Management, managed by Cliff Asness, which holds a $17.4 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish contain David Dreman’s Dreman Value Management, Lee Munder’s Lee Munder Capital Group, and D E Shaw.
Due to the fact that IDACORP Inc (NYSE:IDA) has experienced a declination in interest from hedge fund managers, logic holds that there was a specific group of fund managers that decided to sell off their entire stakes by the end of the third quarter. Intriguingly, Robert B. Gillam’s McKinley Capital Management dropped the largest investment of all the hedgies watched by Insider Monkey, worth an estimated $12.7 million in stock, and Jonathan Barrett and Paul Segal’s Luminus Management was right behind this move, as the fund sold off about $7 million worth of shares. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 3 funds by the end of the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to IDACORP Inc (NYSE:IDA). We will take a look at Apple Hospitality REIT Inc (NYSE:APLE), Post Holdings Inc (NYSE:POST), Sprouts Farmers Market Inc (NASDAQ:SFM), and Two Harbors Investment Corp (NYSE:TWO). All of these stocks’ market caps are closest to IDACORP Inc (NYSE:IDA)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| APLE | 5 | 18599 | 3 |
| POST | 41 | 1363114 | 13 |
| SFM | 22 | 300705 | 8 |
| TWO | 19 | 136397 | -1 |
As you can see, these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $455 million. That figure was $378 million in IDACORP Inc (NYSE:IDA)’s case. Post Holdings Inc (NYSE:POST) is the most popular stock in this table. On the other hand, Apple Hospitality REIT Inc (NYSE:APLE) is the least popular one with only 5 bullish hedge fund positions. IDACORP Inc (NYSE:IDA) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Post Holdings Inc (NYSE:POST) might be a better candidate to consider a long position.
