Is Public Service Enterprise Group Inc. (PEG) A Good Stock To Buy?

You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.

Public Service Enterprise Group Inc. (NYSE:PEG) has seen a decrease in hedge fund sentiment of late. Public Service Enterprise Group Inc. (NYSE:PEG) was in 20 hedge funds’ portfolios at the end of September. There were 23 hedge funds in our database with Public Service Enterprise Group Inc. (NYSE:PEG) positions 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 Ryanair Holdings plc (ADR) (NASDAQ:RYAAY), Southern Copper Corp (NYSE:SCCO), and Canadian Natural Resource Ltd (USA) (NYSE:CNQ) to gather more data points.

In the financial world, there are a large number of methods that stock market investors use to analyze their holdings. Some of the most innovative methods are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the best picks of the top fund managers can outperform the S&P 500 by a solid margin (see the details here).

Keeping this in mind, we’re going to review the key action regarding Public Service Enterprise Group Inc. (NYSE:PEG).

How have hedgies been trading Public Service Enterprise Group Inc. (NYSE:PEG)?

Heading into Q4, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a decline of 13% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, AQR Capital Management, managed by Cliff Asness, holds the largest position in Public Service Enterprise Group Inc. (NYSE:PEG). AQR Capital Management has a $370.8 million position in the stock, comprising 0.7% of its 13F portfolio. Sitting at the No. 2 spot is Adage Capital Management, led by Phill Gross and Robert Atchinson, holding a $32.6 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism include David Harding’s Winton Capital Management, Israel Englander’s Millennium Management, and Ken Griffin’s Citadel Investment Group.

Because Public Service Enterprise Group Inc. (NYSE:PEG) has witnessed a declining sentiment from the entirety of the hedge funds we track, logic holds that there exists a select few fund managers that slashed their positions entirely in the third quarter. At the top of the heap, Jonathan Barrett and Paul Segal’s Luminus Management said goodbye to the biggest stake of the 700 funds followed by Insider Monkey, totaling an estimated $15.4 million in stock. Joel Greenblatt’s fund, Gotham Asset Management, also cut its stock, about $9.3 million worth of shares. These moves are important to note, as total hedge fund interest dropped by 3 funds in the third quarter.

Let’s now review hedge fund activity in other stocks similar to Public Service Enterprise Group Inc. (NYSE:PEG). These stocks are Ryanair Holdings plc (ADR) (NASDAQ:RYAAY), Southern Copper Corp (NYSE:SCCO), Canadian Natural Resource Ltd (USA) (NYSE:CNQ), and Electronic Arts Inc. (NASDAQ:EA). All of these stocks’ market caps match Public Service Enterprise Group Inc. (NYSE:PEG) ‘s market cap.

As you can see, these stocks had an average of 28 hedge funds with bullish positions and the average amount invested in these stocks was $979 million. That figure was $492 million in Public Service Enterprise Group Inc. (NYSE:PEG)’s case. Electronic Arts Inc. (NASDAQ:EA) is the most popular stock in this table. On the other hand, Southern Copper Corp (NYSE:SCCO) is the least popular one with only 10 bullish hedge fund positions. Public Service Enterprise Group Inc. (NYSE:PEG) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Electronic Arts Inc. (NASDAQ:EA) might be a better candidate to consider a long position.