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 (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 835 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about IDACORP Inc (NYSE:IDA).
Is IDACORP Inc (NYSE:IDA) a buy here? Money managers are getting more bullish. The number of bullish hedge fund bets moved up by 3 recently. Our calculations also showed that IDA isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
To the average investor there are dozens of tools stock market investors have at their disposal to assess stocks. Two of the best tools are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the best picks of the top fund managers can outpace the S&P 500 by a very impressive margin (see the details here).
Ken Fisher of Fisher Asset Management
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. With all of this in mind we’re going to review the latest hedge fund action regarding IDACORP Inc (NYSE:IDA).
What does smart money think about IDACORP Inc (NYSE:IDA)?
Heading into the first quarter of 2020, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of 14% from one quarter earlier. By comparison, 20 hedge funds held shares or bullish call options in IDA a year ago. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in IDACORP Inc (NYSE:IDA), which was worth $113.4 million at the end of the third quarter. On the second spot was AQR Capital Management which amassed $47.8 million worth of shares. Citadel Investment Group, D E Shaw, and Fisher 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 Cinctive Capital Management allocated the biggest weight to IDACORP Inc (NYSE:IDA), around 0.47% of its 13F portfolio. Brasada Capital Management is also relatively very bullish on the stock, dishing out 0.32 percent of its 13F equity portfolio to IDA.
As industrywide interest jumped, specific money managers were breaking ground themselves. Cinctive Capital Management, managed by Richard SchimeláandáLawrence Sapanski, created the most outsized position in IDACORP Inc (NYSE:IDA). Cinctive Capital Management had $4.5 million invested in the company at the end of the quarter. Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors also made a $0.8 million investment in the stock during the quarter. The other funds with brand new IDA positions are Matthew Tewksbury’s Stevens Capital Management, Qing Li’s Sciencast Management, and Benjamin A. Smith’s Laurion Capital Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as IDACORP Inc (NYSE:IDA) but similarly valued. We will take a look at Amedisys Inc (NASDAQ:AMED), Hanesbrands Inc. (NYSE:HBI), Kirby Corporation (NYSE:KEX), and Exelixis, Inc. (NASDAQ:EXEL). All of these stocks’ market caps match IDA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AMED | 22 | 219759 | 0 |
| HBI | 40 | 736481 | 6 |
| KEX | 26 | 711162 | 5 |
| EXEL | 23 | 797055 | -7 |
| Average | 27.75 | 616114 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.75 hedge funds with bullish positions and the average amount invested in these stocks was $616 million. That figure was $343 million in IDA’s case. Hanesbrands Inc. (NYSE:HBI) is the most popular stock in this table. On the other hand Amedisys Inc (NASDAQ:AMED) is the least popular one with only 22 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. 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 17.4% in 2020 through March 25th but beat the market by 5.5 percentage points. A small number of hedge funds were also right about betting on IDA, though not to the same extent, as the stock returned -22% during the same time period and outperformed the market.
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.
