Is EXC Stock A Buy or Sell?

In this article we will take a look at whether hedge funds think Exelon Corporation (NASDAQ:EXC) is 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, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.

Is EXC stock a buy? Exelon Corporation (NASDAQ:EXC) investors should be aware of an increase in activity from the world’s largest hedge funds recently. Exelon Corporation (NASDAQ:EXC) was in 30 hedge funds’ portfolios at the end of December. The all time high for this statistic is 40. There were 29 hedge funds in our database with EXC positions at the end of the third quarter. Our calculations also showed that EXC isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here).

Keith Meister of Corvex Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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. With all of this in mind let’s take a look at the latest hedge fund action encompassing Exelon Corporation (NASDAQ:EXC).

Do Hedge Funds Think EXC Is A Good Stock To Buy Now?

At Q4’s end, a total of 30 of the hedge funds tracked by Insider Monkey were long this stock, a change of 3% from the third quarter of 2020. By comparison, 36 hedge funds held shares or bullish call options in EXC a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Two Sigma Advisors held the most valuable stake in Exelon Corporation (NASDAQ:EXC), which was worth $160.8 million at the end of the fourth quarter. On the second spot was Zimmer Partners which amassed $151.5 million worth of shares. Electron Capital Partners, Corvex Capital, and Adage Capital Management 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 Exelon Corporation (NASDAQ:EXC), around 8.26% of its 13F portfolio. Electron Capital Partners is also relatively very bullish on the stock, dishing out 8.2 percent of its 13F equity portfolio to EXC.

With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Electron Capital Partners, managed by Jos Shaver, established the biggest position in Exelon Corporation (NASDAQ:EXC). Electron Capital Partners had $119.4 million invested in the company at the end of the quarter. Phill Gross and Robert Atchinson’s Adage Capital Management also made a $45.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Nicholas Bagnall’s Te Ahumairangi Investment Management, Bruce Kovner’s Caxton Associates LP, and Steve Cohen’s Point72 Asset Management.

Let’s check out hedge fund activity in other stocks similar to Exelon Corporation (NASDAQ:EXC). We will take a look at Dow Inc. (NYSE:DOW), Carvana Co. (NYSE:CVNA), Baxter International Inc. (NYSE:BAX), CNOOC Limited (NYSE:CEO), Pinterest, Inc. (NYSE:PINS), Thomson Reuters Corporation (NYSE:TRI), and Barrick Gold Corporation (NYSE:GOLD). This group of stocks’ market caps are similar to EXC’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 48 hedge funds with bullish positions and the average amount invested in these stocks was $2676 million. That figure was $729 million in EXC’s case. Pinterest, Inc. (NYSE:PINS) is the most popular stock in this table. On the other hand CNOOC Limited (NYSE:CEO) is the least popular one with only 13 bullish hedge fund positions. Exelon Corporation (NASDAQ:EXC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for EXC is 38.9. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.2% in 2021 through April 12th and surpassed the market again by 1.5 percentage points. Unfortunately EXC wasn’t nearly as popular as these 30 stocks (hedge fund sentiment was quite bearish); EXC investors were disappointed as the stock returned 7% since the end of December (through 4/12) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

Disclosure: None. This article was originally published at Insider Monkey.