Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 750 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about First Solar, Inc. (NASDAQ:FSLR).
First Solar, Inc. (NASDAQ:FSLR) has seen an increase in hedge fund interest recently. FSLR was in 24 hedge funds’ portfolios at the end of the second quarter of 2019. There were 23 hedge funds in our database with FSLR holdings at the end of the previous quarter. Our calculations also showed that FSLR isn’t among the 30 most popular stocks among hedge funds (view the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most traders, hedge funds are assumed to be unimportant, outdated financial tools of years past. While there are greater than 8000 funds in operation at present, Our experts choose to focus on the moguls of this club, approximately 750 funds. These money managers command the lion’s share of the hedge fund industry’s total asset base, and by monitoring their unrivaled stock picks, Insider Monkey has unsheathed numerous investment strategies that have historically surpassed the broader indices. Insider Monkey’s flagship hedge fund strategy outstripped the S&P 500 index by around 5 percentage points annually since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s view the latest hedge fund action surrounding First Solar, Inc. (NASDAQ:FSLR).
What does smart money think about First Solar, Inc. (NASDAQ:FSLR)?
At the end of the second quarter, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards FSLR over the last 16 quarters. 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, Lansdowne Partners held the most valuable stake in First Solar, Inc. (NASDAQ:FSLR), which was worth $69.7 million at the end of the second quarter. On the second spot was Millennium Management which amassed $61 million worth of shares. Moreover, Electron Capital Partners, Balyasny Asset Management, and Masters Capital Management were also bullish on First Solar, Inc. (NASDAQ:FSLR), allocating a large percentage of their portfolios to this stock.
Now, key money managers were breaking ground themselves. Ardsley Partners, managed by Philip Hempleman, created the most valuable position in First Solar, Inc. (NASDAQ:FSLR). Ardsley Partners had $5.9 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also made a $4.6 million investment in the stock during the quarter. The other funds with brand new FSLR positions are Ken Fisher’s Fisher Asset Management, Chuck Royce’s Royce & Associates, and John Brennan’s Sirios Capital Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as First Solar, Inc. (NASDAQ:FSLR) but similarly valued. These stocks are PVH Corp (NYSE:PVH), Hill-Rom Holdings, Inc. (NYSE:HRC), The Toro Company (NYSE:TTC), and Alteryx, Inc. (NYSE:AYX). This group of stocks’ market valuations are closest to FSLR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PVH | 32 | 1066193 | 1 |
| HRC | 27 | 627642 | -2 |
| TTC | 24 | 620869 | 8 |
| AYX | 38 | 1209758 | 7 |
| Average | 30.25 | 881116 | 3.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.25 hedge funds with bullish positions and the average amount invested in these stocks was $881 million. That figure was $372 million in FSLR’s case. Alteryx, Inc. (NYSE:AYX) is the most popular stock in this table. On the other hand The Toro Company (NYSE:TTC) is the least popular one with only 24 bullish hedge fund positions. Compared to these stocks First Solar, Inc. (NASDAQ:FSLR) is even less popular than TTC. Hedge funds dodged a bullet by taking a bearish stance towards FSLR. Our calculations showed that the top 20 most popular hedge fund stocks returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately FSLR wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); FSLR investors were disappointed as the stock returned -11.7% during the third quarter 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 many of these stocks already outperformed the market so far in 2019.
Disclosure: None. This article was originally published at Insider Monkey.
