Is DTE Energy Co (DTE) Worthy of Your Portfolio?

Is DTE Energy Co (NYSE:DTE) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from industry insiders. They fail miserably sometimes but historically their consensus stock picks outperformed the market after adjusting for known risk factors.

DTE Energy Co (NYSE:DTE) shareholders have witnessed an increase in activity from the world’s largest hedge funds of late. There were 20 funds tracked by Insider Monkey long the stock at the end of September, compared to 15 funds a quarter earlier. However, the level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as The J.M. Smucker Company (NYSE:SJM), Sasol Limited (ADR) (NYSE:SSL), and Tata Motors Limited (ADR) (NYSE:TTM) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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Now, we’re going to take a peek at the new action encompassing DTE Energy Co (NYSE:DTE).

How have hedgies been trading DTE Energy Co (NYSE:DTE)?

As stated earlier, 20 hedge funds tracked by Insider Monkey were bullish on DTE Energy at the end of September, up by 33% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards DTE over the last five quarters. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, AQR Capital Management, led by Cliff Asness, holds the biggest position in DTE Energy Co (NYSE:DTE). AQR Capital Management has a $180.9 million position in the stock, comprising 0.3% of its 13F portfolio. The second largest stake is held by Jim Simons’ Renaissance Technologies, which holds a $105.2 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining peers with similar optimism contain Phill Gross and Robert Atchinson’s Adage Capital Management and Dmitry Balyasny’s Balyasny Asset Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Now, key money managers were leading the bulls’ herd. Israel Englander’s Millennium Management created the biggest position in DTE Energy Co (NYSE:DTE). Millennium Management had $42.6 million invested in the company at the end of the quarter. Clint Carlson’s Carlson Capital also initiated a $25.4 million position during the quarter. The other funds with new positions in the stock are Matthew Tewksbury’s Stevens Capital Management, Benjamin A. Smith’s Laurion Capital Management, and Paul Marshall and Ian Wace’s Marshall Wace LLP.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as DTE Energy Co (NYSE:DTE) but similarly valued. These stocks are The J.M. Smucker Company (NYSE:SJM), Sasol Limited (ADR) (NYSE:SSL), Tata Motors Limited (ADR) (NYSE:TTM), and Amphenol Corporation (NYSE:APH). This group of stocks’ market valuations are closest to DTE’s market valuation.

As you can see these stocks had an average of 19 funds with bullish positions and the average amount invested in these stocks was $400 million. That figure was $534 million in DTE’s case. The J.M. Smucker Company (NYSE:SJM) is the most popular stock in this table. On the other hand Sasol Limited (ADR) (NYSE:SSL) is the least popular one with only nine hedge fund having reported long positions. DTE Energy Co (NYSE:DTE) 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 The J.M. Smucker Company (NYSE:SJM) might be a better candidate to consider taking a long position in.