With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter of 2021. One of these stocks was FirstEnergy Corp. (NYSE:FE).
Is FirstEnergy Corp. (NYSE:FE) a buy here? Investors who are in the know were getting more bullish. The number of long hedge fund positions improved by 2 recently. FirstEnergy Corp. (NYSE:FE) was in 38 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 59. Our calculations also showed that FE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 36 hedge funds in our database with FE positions at the end of the second quarter.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we’re going to take a look at the recent hedge fund action surrounding FirstEnergy Corp. (NYSE:FE).
Carl Icahn of Icahn Capital
Do Hedge Funds Think FE Is A Good Stock To Buy Now?
At Q3’s end, a total of 38 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from the previous quarter. By comparison, 59 hedge funds held shares or bullish call options in FE a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
More specifically, Icahn Capital LP was the largest shareholder of FirstEnergy Corp. (NYSE:FE), with a stake worth $675.6 million reported as of the end of September. Trailing Icahn Capital LP was First Pacific Advisors LLC, which amassed a stake valued at $152 million. D E Shaw, Empyrean Capital Partners, and 683 Capital Partners 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 Jones Road Capital Management allocated the biggest weight to FirstEnergy Corp. (NYSE:FE), around 4.91% of its 13F portfolio. Lion Point is also relatively very bullish on the stock, earmarking 4.17 percent of its 13F equity portfolio to FE.
As one would reasonably expect, key hedge funds have been driving this bullishness. Point72 Asset Management, managed by Steve Cohen, created the largest position in FirstEnergy Corp. (NYSE:FE). Point72 Asset Management had $33.4 million invested in the company at the end of the quarter. Jinghua Yan’s TwinBeech Capital also made a $3.3 million investment in the stock during the quarter. The other funds with brand new FE positions are Greg Eisner’s Engineers Gate Manager, Noam Gottesman’s GLG Partners, and Michael Gelband’s ExodusPoint Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as FirstEnergy Corp. (NYSE:FE) but similarly valued. We will take a look at Broadridge Financial Solutions, Inc. (NYSE:BR), SK Telecom Co., Ltd. (NYSE:SKM), Halliburton Company (NYSE:HAL), M&T Bank Corporation (NYSE:MTB), Asana Inc. (NYSE:ASAN), PG&E Corporation (NYSE:PCG), and Bio-Techne Corporation (NASDAQ:TECH). This group of stocks’ market valuations resemble FE’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BR | 17 | 229119 | -10 |
| SKM | 6 | 108281 | -2 |
| HAL | 29 | 1247608 | 0 |
| MTB | 27 | 774232 | -19 |
| ASAN | 33 | 1053115 | 11 |
| PCG | 54 | 3825487 | -10 |
| TECH | 33 | 432450 | 8 |
| Average | 28.4 | 1095756 | -3.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.4 hedge funds with bullish positions and the average amount invested in these stocks was $1096 million. That figure was $1480 million in FE’s case. PG&E Corporation (NYSE:PCG) is the most popular stock in this table. On the other hand SK Telecom Co., Ltd. (NYSE:SKM) is the least popular one with only 6 bullish hedge fund positions. FirstEnergy Corp. (NYSE:FE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FE is 59.7. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Hedge funds were also right about betting on FE as the stock returned 6.8% since the end of Q3 (through 11/30) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Firstenergy Corp (NYSE:FE)
Follow Firstenergy Corp (NYSE:FE)
Suggested Articles:
Disclosure: None. This article was originally published at Insider Monkey.
