We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (read our latest 10 coronavirus predictions).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 835 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of December 31st, 2019. 0
Is Alliant Energy Corporation (NYSE:LNT) going to take off soon? The smart money is getting more optimistic. The number of long hedge fund bets went up by 5 lately. Our calculations also showed that LNT isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video below for Q3 rankings). LNT was in 28 hedge funds’ portfolios at the end of December. There were 23 hedge funds in our database with LNT holdings at the end of the previous quarter.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 72.9% since March 2017 and outperformed the S&P 500 ETFs by more than 41 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Jeffrey Talpins of Element Capital
We leave no stone unturned when looking for the next great investment idea. For example we recently identified a stock that trades 25% below the net cash on its balance sheet. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences, and go through short-term trade recommendations like this one. We even check out the recommendations of services with hard to believe track records. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to review the new hedge fund action regarding Alliant Energy Corporation (NYSE:LNT).
How are hedge funds trading Alliant Energy Corporation (NYSE:LNT)?
At the end of the fourth quarter, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 22% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in LNT over the last 18 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Alliant Energy Corporation (NYSE:LNT) was held by Zimmer Partners, which reported holding $164.2 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $140.3 million position. Other investors bullish on the company included ExodusPoint Capital, Renaissance Technologies, and AQR Capital Management. In terms of the portfolio weights assigned to each position Yaupon Capital allocated the biggest weight to Alliant Energy Corporation (NYSE:LNT), around 5.42% of its 13F portfolio. Shelter Harbor Advisors is also relatively very bullish on the stock, setting aside 5.13 percent of its 13F equity portfolio to LNT.
As one would reasonably expect, key money managers have been driving this bullishness. Carlson Capital, managed by Clint Carlson, assembled the largest position in Alliant Energy Corporation (NYSE:LNT). Carlson Capital had $15.9 million invested in the company at the end of the quarter. Phill Gross and Robert Atchinson’s Adage Capital Management also initiated a $15 million position during the quarter. The other funds with brand new LNT positions are Steve Pattyn’s Yaupon Capital, Michael Kharitonov and Jon David McAuliffe’s Voleon Capital, and Jeffrey Talpins’s Element Capital Management.
Let’s check out hedge fund activity in other stocks similar to Alliant Energy Corporation (NYSE:LNT). These stocks are IDEX Corporation (NYSE:IEX), SVB Financial Group (NASDAQ:SIVB), Franklin Resources, Inc. (NYSE:BEN), and FMC Corporation (NYSE:FMC). This group of stocks’ market caps resemble LNT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IEX | 23 | 487828 | 2 |
| SIVB | 35 | 740028 | -7 |
| BEN | 37 | 565331 | 0 |
| FMC | 35 | 571116 | -4 |
| Average | 32.5 | 591076 | -2.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.5 hedge funds with bullish positions and the average amount invested in these stocks was $591 million. That figure was $560 million in LNT’s case. Franklin Resources, Inc. (NYSE:BEN) is the most popular stock in this table. On the other hand IDEX Corporation (NYSE:IEX) is the least popular one with only 23 bullish hedge fund positions. Alliant Energy Corporation (NYSE:LNT) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 22.3% in 2020 through March 16th but still beat the market by 3.2 percentage points. A small number of hedge funds were also right about betting on LNT as the stock returned -12.5% during the same time period and outperformed the market by an even larger margin.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
