We can judge whether Entergy Corporation (NYSE:ETR) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market when we factor in known risk factors.
Entergy Corporation (NYSE:ETR) investors should pay attention to a decrease in support from the world’s most elite money managers in recent months. Our calculations also showed that ETR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
According to most investors, hedge funds are viewed as slow, old financial tools of the past. While there are over 8000 funds with their doors open at present, We hone in on the masters of this group, around 750 funds. These hedge fund managers manage the majority of the hedge fund industry’s total capital, and by monitoring their highest performing stock picks, Insider Monkey has formulated a number of investment strategies that have historically outrun the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points a year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Phill Gross of Adage Capital Management
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a gander at the key hedge fund action regarding Entergy Corporation (NYSE:ETR).
What does smart money think about Entergy Corporation (NYSE:ETR)?
Heading into the fourth quarter of 2019, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of -17% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ETR over the last 17 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies has the number one position in Entergy Corporation (NYSE:ETR), worth close to $563.7 million, comprising 0.5% of its total 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, led by Ken Griffin, holding a $259.3 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other professional money managers that are bullish encompass Israel Englander’s Millennium Management, Phill Gross and Robert Atchinson’s Adage Capital Management and Michael Gelband’s ExodusPoint Capital. In terms of the portfolio weights assigned to each position Shelter Harbor Advisors allocated the biggest weight to Entergy Corporation (NYSE:ETR), around 8.89% of its portfolio. Covalis Capital is also relatively very bullish on the stock, setting aside 5.24 percent of its 13F equity portfolio to ETR.
Since Entergy Corporation (NYSE:ETR) has faced falling interest from the smart money, logic holds that there was a specific group of funds that decided to sell off their entire stakes last quarter. Intriguingly, Dmitry Balyasny’s Balyasny Asset Management dropped the largest position of the “upper crust” of funds monitored by Insider Monkey, valued at about $53.3 million in stock, and Jos Shaver’s Electron Capital Partners was right behind this move, as the fund sold off about $32.3 million worth. These transactions are interesting, as total hedge fund interest was cut by 5 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Entergy Corporation (NYSE:ETR). We will take a look at Chipotle Mexican Grill, Inc. (NYSE:CMG), Parker-Hannifin Corporation (NYSE:PH), Carnival Corporation & Plc (NYSE:CCL), and Fortive Corporation (NYSE:FTV). All of these stocks’ market caps are similar to ETR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CMG | 38 | 4057541 | 1 |
| PH | 25 | 803965 | -1 |
| CCL | 29 | 589089 | -7 |
| FTV | 34 | 803239 | 6 |
| Average | 31.5 | 1563459 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.5 hedge funds with bullish positions and the average amount invested in these stocks was $1563 million. That figure was $1678 million in ETR’s case. Chipotle Mexican Grill, Inc. (NYSE:CMG) is the most popular stock in this table. On the other hand Parker-Hannifin Corporation (NYSE:PH) is the least popular one with only 25 bullish hedge fund positions. Compared to these stocks Entergy Corporation (NYSE:ETR) is even less popular than PH. Hedge funds dodged a bullet by taking a bearish stance towards ETR. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately ETR wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); ETR investors were disappointed as the stock returned 0% during the fourth quarter (through the end of November) 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 70 percent of these stocks already outperformed the market so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
