The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on June 30th. We at Insider Monkey have made an extensive database of more than 873 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Exelon Corporation (NYSE:EXC) based on those filings.
Is Exelon Corporation (NYSE:EXC) a good stock to buy? The smart money was in a pessimistic mood. The number of bullish hedge fund positions were cut by 9 recently. Exelon Corporation (NYSE:EXC) was in 35 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 44. Our calculations also showed that EXC isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Keith Meister of Corvex Capital
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Do Hedge Funds Think EXC Is A Good Stock To Buy Now?
At Q2’s end, a total of 35 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -20% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in EXC over the last 24 quarters. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Zimmer Partners, managed by Stuart J. Zimmer, holds the biggest position in Exelon Corporation (NYSE:EXC). Zimmer Partners has a $244.8 million position in the stock, comprising 3.3% of its 13F portfolio. Coming in second is Corvex Capital, led by Keith Meister, holding a $172.4 million position; the fund has 5.8% of its 13F portfolio invested in the stock. Remaining professional money managers with similar optimism consist of Jos Shaver’s Electron Capital Partners, Zach Schreiber’s Point State Capital and Jeffrey Altman’s Owl Creek Asset Management. In terms of the portfolio weights assigned to each position Coann Capital allocated the biggest weight to Exelon Corporation (NYSE:EXC), around 7.73% of its 13F portfolio. Electron Capital Partners is also relatively very bullish on the stock, setting aside 6.24 percent of its 13F equity portfolio to EXC.
Since Exelon Corporation (NYSE:EXC) has experienced falling interest from hedge fund managers, it’s easy to see that there was a specific group of hedgies who were dropping their positions entirely heading into Q3. It’s worth mentioning that Michael Gelband’s ExodusPoint Capital dumped the largest position of all the hedgies monitored by Insider Monkey, totaling an estimated $23.4 million in stock. Zilvinas Mecelis’s fund, Covalis Capital, also dropped its stock, about $9.1 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 9 funds heading into Q3.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Exelon Corporation (NYSE:EXC) but similarly valued. We will take a look at Canadian Natural Resources Limited (NYSE:CNQ), Simon Property Group, Inc (NYSE:SPG), Wipro Limited (NYSE:WIT), Aptiv PLC (NYSE:APTV), Centene Corporation (NYSE:CNC), Digital Realty Trust, Inc. (NYSE:DLR), and American Electric Power Company, Inc. (NYSE:AEP). This group of stocks’ market valuations resemble EXC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CNQ | 27 | 777129 | -2 |
| SPG | 37 | 666243 | 6 |
| WIT | 14 | 164007 | 1 |
| APTV | 40 | 1677761 | -10 |
| CNC | 49 | 3240123 | -4 |
| DLR | 30 | 424723 | 8 |
| AEP | 29 | 726241 | -3 |
| Average | 32.3 | 1096604 | -0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.3 hedge funds with bullish positions and the average amount invested in these stocks was $1097 million. That figure was $1195 million in EXC’s case. Centene Corporation (NYSE:CNC) is the most popular stock in this table. On the other hand Wipro Limited (NYSE:WIT) is the least popular one with only 14 bullish hedge fund positions. Exelon Corporation (NYSE:EXC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for EXC is 49.9. 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. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 21.8% in 2021 through October 11th and still beat the market by 4.4 percentage points. Hedge funds were also right about betting on EXC as the stock returned 8.2% since the end of Q2 (through 10/11) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Exelon Corp (NYSE:EXC)
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Disclosure: None. This article was originally published at Insider Monkey.
