Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Solaredge Technologies Inc (NASDAQ:SEDG).
Solaredge Technologies Inc (NASDAQ:SEDG) has seen an increase in enthusiasm from smart money of late. SEDG was in 22 hedge funds’ portfolios at the end of the first quarter of 2019. There were 14 hedge funds in our database with SEDG positions at the end of the previous quarter. Our calculations also showed that SEDG isn’t among the 30 most popular stocks among hedge funds.
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 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 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.
We’re going to analyze the latest hedge fund action encompassing Solaredge Technologies Inc (NASDAQ:SEDG).
Hedge fund activity in Solaredge Technologies Inc (NASDAQ:SEDG)
At Q1’s end, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 57% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in SEDG over the last 15 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Noked Capital was the largest shareholder of Solaredge Technologies Inc (NASDAQ:SEDG), with a stake worth $28.1 million reported as of the end of March. Trailing Noked Capital was Arrowstreet Capital, which amassed a stake valued at $19.1 million. Bloom Tree Partners, Renaissance Technologies, and Balyasny Asset Management were also very fond of the stock, giving the stock large weights in their portfolios.
As industrywide interest jumped, some big names have jumped into Solaredge Technologies Inc (NASDAQ:SEDG) headfirst. Noked Capital, managed by Roy Vermus and Shlomi Bracha, created the biggest position in Solaredge Technologies Inc (NASDAQ:SEDG). Noked Capital had $28.1 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $19.1 million investment in the stock during the quarter. The following funds were also among the new SEDG investors: Dmitry Balyasny’s Balyasny Asset Management, Steve Cohen’s Point72 Asset Management, and Richard Mashaal’s Rima Senvest Management.
Let’s go over hedge fund activity in other stocks similar to Solaredge Technologies Inc (NASDAQ:SEDG). These stocks are Crescent Point Energy Corp (NYSE:CPG), MaxLinear, Inc. (NYSE:MXL), Mueller Industries, Inc. (NYSE:MLI), and Axos Financial, Inc. (NYSE:AX). This group of stocks’ market values match SEDG’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CPG | 17 | 72343 | 1 |
| MXL | 6 | 33874 | 1 |
| MLI | 13 | 184965 | 3 |
| AX | 13 | 61258 | -2 |
| Average | 12.25 | 88110 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $88 million. That figure was $115 million in SEDG’s case. Crescent Point Energy Corp (NYSE:CPG) is the most popular stock in this table. On the other hand MaxLinear, Inc. (NYSE:MXL) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Solaredge Technologies Inc (NASDAQ:SEDG) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Hedge funds were also right about betting on SEDG as the stock returned 57.1% during the same period and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.
