Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Quanta Services Inc (NYSE:PWR).
Quanta Services Inc (NYSE:PWR) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 34 hedge funds’ portfolios at the end of the third quarter of 2018. At the end of this article we will also compare PWR to other stocks including SINA Corp (NASDAQ:SINA), Enbridge Energy Partners, L.P. (NYSE:EEP), and Littelfuse, Inc. (NASDAQ:LFUS) to get a better sense of its popularity.
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We’re going to view the key hedge fund action encompassing Quanta Services Inc (NYSE:PWR).
How have hedgies been trading Quanta Services Inc (NYSE:PWR)?
Heading into the fourth quarter of 2018, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, no change from the previous quarter. Below, you can check out the change in hedge fund sentiment towards PWR over the last 13 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
The largest stake in Quanta Services Inc (NYSE:PWR) was held by Peconic Partners LLC, which reported holding $102.5 million worth of stock at the end of September. It was followed by Millennium Management with a $86.7 million position. Other investors bullish on the company included Greenhaven Associates, D E Shaw, and Two Sigma Advisors.
Due to the fact that Quanta Services Inc (NYSE:PWR) has faced declining sentiment from hedge fund managers, it’s easy to see that there lies a certain “tier” of money managers that slashed their entire stakes last quarter. It’s worth mentioning that Bruce Kovner’s Caxton Associates LP dropped the biggest position of the “upper crust” of funds tracked by Insider Monkey, comprising an estimated $5.7 million in stock, and Glenn Russell Dubin’s Highbridge Capital Management was right behind this move, as the fund sold off about $4.4 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks similar to Quanta Services Inc (NYSE:PWR). These stocks are SINA Corp (NASDAQ:SINA), Enbridge Energy Partners, L.P. (NYSE:EEP), Littelfuse, Inc. (NASDAQ:LFUS), and Sterling Bancorp (NYSE:STL). This group of stocks’ market valuations match PWR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SINA | 24 | 769904 | -4 |
| EEP | 3 | 7459 | 0 |
| LFUS | 22 | 258266 | 2 |
| STL | 21 | 396932 | 1 |
| Average | 17.5 | 358140 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.5 hedge funds with bullish positions and the average amount invested in these stocks was $358 million. That figure was $509 million in PWR’s case. SINA Corp (NASDAQ:SINA) is the most popular stock in this table. On the other hand Enbridge Energy Partners, L.P. (NYSE:EEP) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Quanta Services Inc (NYSE:PWR) 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.
Disclosure: None. This article was originally published at Insider Monkey.
