Insider Monkey has processed numerous 13F filings of hedge funds and famous investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and investors’ positions as of the end of the fourth quarter. You can find write-ups about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves and analyze what the smart money thinks of Entergy Corporation (NYSE:ETR) based on that data.
Entergy Corporation (NYSE:ETR) was in 31 hedge funds’ portfolios at the end of the fourth quarter of 2018. ETR has seen an increase in hedge fund interest recently. There were 27 hedge funds in our database with ETR holdings at the end of the previous quarter. Currently the overall hedge fund sentiment towards ETR is at an all time high. This is usually a very bullish signal. For example hedge fund sentiment in Xilinx Inc. (XLNX) was also at its all time high at the beginning of this year and the stock returned more than 46% in 2.5 months. We observed a similar performance from Progressive Corporation (PGR) which returned 27% and outperformed the SPY by nearly 14 percentage points in 2.5 months. Hedge fund sentiment towards IQVIA Holdings Inc. (IQV), Brookfield Asset Management Inc. (BAM), Atlassian Corporation Plc (TEAM), RCL, MTB and CRH hit all time highs at the end of December, and all of these stocks returned more than 20% in the first 2.5 months of this year.
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 flagship best performing hedge funds strategy returned 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Let’s take a gander at the fresh hedge fund action surrounding Entergy Corporation (NYSE:ETR).
What have hedge funds been doing with Entergy Corporation (NYSE:ETR)?
At Q4’s end, a total of 31 of the hedge funds tracked by Insider Monkey were long this stock, a change of 15% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ETR over the last 14 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
The largest stake in Entergy Corporation (NYSE:ETR) was held by Renaissance Technologies, which reported holding $333.9 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $191.8 million position. Other investors bullish on the company included Millennium Management, Adage Capital Management, and Luminus Management.
Now, key hedge funds were breaking ground themselves. Carlson Capital, managed by Clint Carlson, created the most outsized position in Entergy Corporation (NYSE:ETR). Carlson Capital had $46.9 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $26.1 million position during the quarter. The following funds were also among the new ETR investors: Bruce Kovner’s Caxton Associates LP, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Brandon Haley’s Holocene Advisors.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Entergy Corporation (NYSE:ETR) but similarly valued. These stocks are Harris Corporation (NYSE:HRS), Grifols SA (NASDAQ:GRFS), Lululemon Athletica inc. (NASDAQ:LULU), and Liberty Global plc (NASDAQ:LBTYA). This group of stocks’ market values are similar to ETR’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HRS | 23 | 677895 | -4 |
| GRFS | 14 | 185775 | 2 |
| LULU | 36 | 932595 | -9 |
| LBTYA | 32 | 1236410 | -7 |
| Average | 26.25 | 758169 | -4.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.25 hedge funds with bullish positions and the average amount invested in these stocks was $758 million. That figure was $1504 million in ETR’s case. Lululemon Athletica inc. (NASDAQ:LULU) is the most popular stock in this table. On the other hand Grifols SA (NASDAQ:GRFS) is the least popular one with only 14 bullish hedge fund positions. Entergy Corporation (NYSE:ETR) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 15 most popular stocks among hedge funds returned 19.7% through March 15th and outperformed the S&P 500 ETF (SPY) by 6.6 percentage points. Unfortunately ETR wasn’t in this group. Hedge funds that bet on ETR were disappointed as the stock returned 11% and slightly underperformed the market. If you are interested in investing in large cap stocks, you should check out the top 15 hedge fund stocks as 13 of these outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.
