Here is What Hedge Funds Think About Canadian Solar Inc. (CSIQ)

Is Canadian Solar Inc. (NASDAQ:CSIQ) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.

Is Canadian Solar Inc. (NASDAQ:CSIQ) going to take off soon? The best stock pickers are becoming less hopeful. The number of long hedge fund positions retreated by 10 recently. At the end of this article we will also compare CSIQ to other stocks, including Repligen Corporation (NASDAQ:RGEN), Green Dot Corporation (NYSE:GDOT), and Albany International Corp. (NYSE:AIN) to get a better sense of its popularity.

In the 21st century investor’s toolkit there are numerous methods investors can use to analyze their stock investments. A couple of the most innovative methods are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the top picks of the best money managers can outpace the S&P 500 by a very impressive margin (see the details here).

Keeping this in mind, let’s review the new action regarding Canadian Solar Inc. (NASDAQ:CSIQ).

How are hedge funds trading Canadian Solar Inc. (NASDAQ:CSIQ)?

At the end of the third quarter, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 31% from one quarter earlier. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Millennium Management, run by Israel Englander, holds the largest position in Canadian Solar Inc. (NASDAQ:CSIQ). The fund has a $44.1 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Quentec Asset Management, led by Ken Hahn, holding a $13.1 million position; the fund has 2.2% of its 13F portfolio invested in the stock. Some other peers that are bullish contain Jonathan Barrett and Paul Segal’s Luminus Management, and Kenneth Tropin’s Graham Capital Management.

Because Canadian Solar Inc. (NASDAQ:CSIQ) has experienced bearish sentiment from the smart money, logic holds that there lies a certain “tier” of hedgies who sold off their entire stakes heading into Q4. At the top of the heap, Clifford Fox’s Columbus Circle Investors dumped the largest stake of the 700 funds monitored by Insider Monkey, totaling about $29.1 million in stock. Jacob Gottlieb’s fund, Visium Asset Management, also dumped its holding, about $11.2 million worth of CSIQ shares. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 10 funds heading into Q4.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Canadian Solar Inc. (NASDAQ:CSIQ) but similarly valued. These stocks are Repligen Corporation (NASDAQ:RGEN), Green Dot Corporation (NYSE:GDOT), Albany International Corp. (NYSE:AIN), and PTC Therapeutics, Inc. (NASDAQ:PTCT). All of these stocks’ market caps are similar to CSIQ’s market cap.

As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $99 million. That figure was $106 million in CSIQ’s case. PTC Therapeutics, Inc. (NASDAQ:PTCT) is the most popular stock in this table, while Albany International Corp. (NYSE:AIN) is the laggard with only 12 bullish hedge fund positions. Canadian Solar Inc. (NASDAQ:CSIQ) is not the most popular stock in this group, but hedge fund interest is still above average. While this is a slightly positive signal, we’d rather spend our time researching stocks that hedge funds are piling on. In this regard PTCT might be a better candidate to consider a long position.