Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 817 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Brookfield Renewable Partners L.P. (NYSE:BEP), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is BEP a good stock to buy now? Investors who are in the know were becoming more confident. The number of long hedge fund positions improved by 12 lately. Brookfield Renewable Partners L.P. (NYSE:BEP) was in 17 hedge funds’ portfolios at the end of September. The all time high for this statistic is 5. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BEP isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
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 monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Bernard Lambilliotte of Ecofin Ltd
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now let’s check out the fresh hedge fund action encompassing Brookfield Renewable Partners L.P. (NYSE:BEP).
Do Hedge Funds Think BEP Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 240% from the second quarter of 2020. On the other hand, there were a total of 4 hedge funds with a bullish position in BEP a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Brookfield Renewable Partners L.P. (NYSE:BEP), with a stake worth $158.9 million reported as of the end of September. Trailing Renaissance Technologies was D E Shaw, which amassed a stake valued at $33.3 million. Ecofin Ltd, Ecofin Ltd, and Citadel Investment Group 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 Ecofin Ltd allocated the biggest weight to Brookfield Renewable Partners L.P. (NYSE:BEP), around 5.73% of its 13F portfolio. Ecofin Ltd is also relatively very bullish on the stock, dishing out 5.07 percent of its 13F equity portfolio to BEP.
Now, some big names have jumped into Brookfield Renewable Partners L.P. (NYSE:BEP) headfirst. Renaissance Technologies, founded by Jim Simons, created the largest position in Brookfield Renewable Partners L.P. (NYSE:BEP). Renaissance Technologies had $158.9 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also made a $33.3 million investment in the stock during the quarter. The following funds were also among the new BEP investors: Bernard Lambilliotte’s Ecofin Ltd, Ken Griffin’s Citadel Investment Group, and Steve Cohen’s Point72 Asset Management.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Brookfield Renewable Partners L.P. (NYSE:BEP) but similarly valued. We will take a look at WPP Plc (NYSE:WPP), PTC Inc (NASDAQ:PTC), InterContinental Hotels Group PLC (NYSE:IHG), Loews Corporation (NYSE:L), DENTSPLY SIRONA Inc. (NASDAQ:XRAY), Bio-Techne Corporation (NASDAQ:TECH), and Albemarle Corporation (NYSE:ALB). This group of stocks’ market values are similar to BEP’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WPP | 7 | 29329 | -2 |
| PTC | 39 | 1342048 | -1 |
| IHG | 7 | 11037 | 2 |
| L | 18 | 135606 | -10 |
| XRAY | 25 | 946124 | -3 |
| TECH | 30 | 259252 | 3 |
| ALB | 27 | 112814 | 2 |
| Average | 21.9 | 405173 | -1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.9 hedge funds with bullish positions and the average amount invested in these stocks was $405 million. That figure was $250 million in BEP’s case. PTC Inc (NASDAQ:PTC) is the most popular stock in this table. On the other hand WPP Plc (NYSE:WPP) is the least popular one with only 7 bullish hedge fund positions. Brookfield Renewable Partners L.P. (NYSE:BEP) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BEP is 55.6. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on BEP as the stock returned 15.2% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.
Follow Brookfield Renewable Partners L.p. (NYSE:BEP)
Follow Brookfield Renewable Partners L.p. (NYSE:BEP)
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Disclosure: None. This article was originally published at Insider Monkey.
