Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track more than 700 prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ recent losses in Facebook. Let’s take a closer look at what the funds we track think about Enphase Energy Inc (NASDAQ:ENPH) in this article.
Enphase Energy Inc (NASDAQ:ENPH) shareholders have witnessed an increase in hedge fund interest in recent months. ENPH was in 19 hedge funds’ portfolios at the end of September. There were 18 hedge funds in our database with ENPH holdings at the end of the previous quarter. Our calculations also showed that enph isn’t among the 30 most popular stocks among hedge funds.
In the eyes of most market participants, hedge funds are seen as unimportant, outdated investment vehicles of yesteryear. While there are over 8,000 funds trading today, We hone in on the aristocrats of this group, around 700 funds. These investment experts control the lion’s share of the smart money’s total capital, and by observing their highest performing equity investments, Insider Monkey has formulated many investment strategies that have historically beaten the S&P 500 index. Insider Monkey’s flagship hedge fund strategy surpassed the S&P 500 index by 6 percentage points a year since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 24% since February 2017 (through December 3rd) even though the market was up nearly 23% during the same period. We just shared a list of 11 short targets in our latest quarterly update.
Cliff Asness of AQR Capital Management
Let’s take a peek at the new hedge fund action surrounding Enphase Energy Inc (NASDAQ:ENPH).
What does the smart money think about Enphase Energy Inc (NASDAQ:ENPH)?
Heading into the fourth quarter of 2018, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from the previous quarter. On the other hand, there were a total of 9 hedge funds with a bullish position in ENPH at the beginning of this year. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
More specifically, Park West Asset Management was the largest shareholder of Enphase Energy Inc (NASDAQ:ENPH), with a stake worth $18.3 million reported as of the end of September. Trailing Park West Asset Management was Tenzing Global Investors, which amassed a stake valued at $18.2 million. Electron Capital Partners, Bloom Tree Partners, and AQR Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
Now, specific money managers were breaking ground themselves. Bloom Tree Partners, managed by Alok Agrawal, initiated the most outsized position in Enphase Energy Inc (NASDAQ:ENPH). Bloom Tree Partners had $6.9 million invested in the company at the end of the quarter. Daniel S. Och’s OZ Management also initiated a $1.3 million position during the quarter. The following funds were also among the new ENPH investors: Michael A. Price and Amos Meron’s Empyrean Capital Partners and Andrew Weiss’s Weiss Asset Management.
Let’s also examine hedge fund activity in other stocks similar to Enphase Energy Inc (NASDAQ:ENPH). We will take a look at Replimune Group, Inc. (NASDAQ:REPL), Zealand Pharma A/S (NASDAQ:ZEAL), Akebia Therapeutics Inc (NASDAQ:AKBA), and Vishay Precision Group Inc (NYSE:VPG). This group of stocks’ market caps resemble ENPH’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| REPL | 9 | 79637 | 9 |
| ZEAL | 3 | 16450 | 0 |
| AKBA | 19 | 122265 | 2 |
| VPG | 15 | 135276 | -1 |
| Average | 11.5 | 88407 | 2.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.5 hedge funds with bullish positions and the average amount invested in these stocks was $88 million. That figure was $65 million in ENPH’s case. Akebia Therapeutics Inc (NASDAQ:AKBA) is the most popular stock in this table. On the other hand Zealand Pharma A/S (NASDAQ:ZEAL) is the least popular one with only 3 bullish hedge fund positions. Enphase Energy Inc (NASDAQ:ENPH) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard AKBA might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
