We are still in an overall bull market and many stocks that smart money investors were piling into surged through October 17th. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 45% and 39% respectively. Hedge funds’ top 3 stock picks returned 34.4% this year and beat the S&P 500 ETFs by 13 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Genie Energy Ltd (NYSE:GNE).
Genie Energy Ltd (NYSE:GNE) shareholders have witnessed an increase in hedge fund sentiment lately. Our calculations also showed that GNE isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To most stock holders, hedge funds are seen as unimportant, outdated financial tools of yesteryear. While there are greater than 8000 funds with their doors open at the moment, We look at the leaders of this club, around 750 funds. These investment experts preside over bulk of all hedge funds’ total asset base, and by tracking their unrivaled equity investments, Insider Monkey has spotted numerous investment strategies that have historically exceeded the market. Insider Monkey’s flagship hedge fund strategy exceeded the S&P 500 index by around 5 percentage points per annum since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
In addition to following the biggest hedge funds for investment ideas, we also share stock pitches from conferences, investor letters and other sources like this one where the fund manager is talking about two under the radar 1000% return potential stocks: first one in internet infrastructure and the second in the heart of advertising market. We use hedge fund buy/sell signals to determine whether to conduct in-depth analysis of these stock ideas which take days. Now we’re going to take a gander at the key hedge fund action encompassing Genie Energy Ltd (NYSE:GNE).
What have hedge funds been doing with Genie Energy Ltd (NYSE:GNE)?
Heading into the third quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from one quarter earlier. On the other hand, there were a total of 7 hedge funds with a bullish position in GNE a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Genie Energy Ltd (NYSE:GNE) was held by Renaissance Technologies, which reported holding $5.7 million worth of stock at the end of March. It was followed by Kahn Brothers with a $4.9 million position. Other investors bullish on the company included Arrowstreet Capital, Citadel Investment Group, and D E Shaw.
With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Kahn Brothers, managed by Irving Kahn, initiated the most outsized position in Genie Energy Ltd (NYSE:GNE). Kahn Brothers had $4.9 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0.3 million investment in the stock during the quarter. The following funds were also among the new GNE investors: John Overdeck and David Siegel’s Two Sigma Advisors and Roger Ibbotson’s Zebra Capital Management.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Genie Energy Ltd (NYSE:GNE) but similarly valued. We will take a look at Harpoon Therapeutics, Inc. (NASDAQ:HARP), Tecnoglass Inc. (NASDAQ:TGLS), Catasys, Inc. (NASDAQ:CATS), and Exela Technologies, Inc. (NASDAQ:XELA). This group of stocks’ market valuations are closest to GNE’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HARP | 6 | 64480 | 0 |
| TGLS | 5 | 9558 | -2 |
| CATS | 6 | 7067 | 0 |
| XELA | 9 | 63939 | -1 |
| Average | 6.5 | 36261 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.5 hedge funds with bullish positions and the average amount invested in these stocks was $36 million. That figure was $13 million in GNE’s case. Exela Technologies, Inc. (NASDAQ:XELA) is the most popular stock in this table. On the other hand Tecnoglass Inc. (NASDAQ:TGLS) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Genie Energy Ltd (NYSE:GNE) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately GNE wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on GNE were disappointed as the stock returned -29.2% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market in Q3.
Disclosure: None. This article was originally published at Insider Monkey.
