The successful funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at NRG Yield, Inc. Class C (NYSE:NYLD) from the perspective of those successful funds.
Is NRG Yield, Inc. Class C (NYSE:NYLD) the right pick for your portfolio? Money managers are thoroughly in a pessimistic mood. The number of bullish hedge fund investments retreated by 4 in recent months. There were 29 hedge funds in our database with NYLD holdings at the end of the previous quarter. 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 Laredo Petroleum Holdings Inc (NYSE:LPI), Energizer Holdings, Inc. (NYSE:ENR), and Integra Lifesciences Holdings Corp (NASDAQ:IART) to gather more data points.
Follow Clearway Energy Inc. (NYSE:CWEN)
Follow Clearway Energy Inc. (NYSE:CWEN)
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.
photofriday/Shutterstock.com
How have hedgies been trading NRG Yield, Inc. Class C (NYSE:NYLD)?
Heading into the fourth quarter of 2016, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a decline of 14% from the second quarter of 2016. By comparison, 24 hedge funds held shares or bullish call options in NYLD heading into this year. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Passport Capital, led by John Burbank, holds the largest position in NRG Yield, Inc. Class C (NYSE:NYLD). Passport Capital has a $50.9 million position in the stock, comprising 1.1% of its 13F portfolio. On Passport Capital’s heels is Levin Capital Strategies, led by John A. Levin, which holds a $30.6 million position. Remaining members of the smart money with similar optimism consist of Bernard Lambilliotte’s Ecofin Ltd, John Osterweis’ Osterweis Capital Management and Jonathan Barrett and Paul Segal’s Luminus Management. We should note that Luminus Management is 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.
Seeing as NRG Yield, Inc. Class C (NYSE:NYLD) has gone through a decline in interest from hedge fund managers, we can see that there exists a select few hedgies who were dropping their positions entirely by the end of the third quarter. It’s worth mentioning that Eric Edidin and Josh Lobel’s Archer Capital Management got rid of the largest position of all the hedgies watched by Insider Monkey, valued at an estimated $24.8 million in stock. Robert Pitts’ fund, Steadfast Capital Management, also sold off its stock, about $14.6 million worth.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as NRG Yield, Inc. Class C (NYSE:NYLD) but similarly valued. These stocks are Laredo Petroleum Holdings Inc (NYSE:LPI), Energizer Holdings, Inc. (NYSE:ENR), Integra Lifesciences Holdings Corp (NASDAQ:IART), and United States Cellular Corporation (NYSE:USM). All of these stocks’ market caps resemble NYLD’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LPI | 22 | 461028 | 1 |
| ENR | 20 | 273772 | -4 |
| IART | 19 | 132579 | 3 |
| USM | 11 | 143451 | 0 |
As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $253 million. That figure was $210 million in NYLD’s case. Laredo Petroleum Holdings Inc (NYSE:LPI) is the most popular stock in this table. On the other hand United States Cellular Corporation (NYSE:USM) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks NRG Yield, Inc. Class C (NYSE:NYLD) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Suggested Articles:
Highest Paying Countries For Doctors
Biggest Gun Manufacturers In The World
Best Military Documentaries On Netflix
Disclosure: None
