After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of March 31st. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards SPI Energy Co., Ltd. (NASDAQ:SPI).
Is SPI a good stock to buy? SPI Energy Co., Ltd. (NASDAQ:SPI) shareholders have witnessed an increase in activity from the world’s largest hedge funds in recent months. SPI Energy Co., Ltd. (NASDAQ:SPI) was in 5 hedge funds’ portfolios at the end of March. The all time high for this statistic was 4. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that SPI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Donald Sussman of Paloma Partners
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to review the key hedge fund action encompassing SPI Energy Co., Ltd. (NASDAQ:SPI).
Do Hedge Funds Think SPI Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from the fourth quarter of 2020. On the other hand, there were a total of 0 hedge funds with a bullish position in SPI a year ago. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Citadel Investment Group, managed by Ken Griffin, holds the number one position in SPI Energy Co., Ltd. (NASDAQ:SPI). Citadel Investment Group has a $1.1 million call position in the stock, comprising less than 0.1%% of its 13F portfolio. The second most bullish fund manager is Sabby Capital, led by Hal Mintz, holding a $1 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other professional money managers that are bullish contain Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Donald Sussman’s Paloma Partners. In terms of the portfolio weights assigned to each position Sabby Capital allocated the biggest weight to SPI Energy Co., Ltd. (NASDAQ:SPI), around 0.19% of its 13F portfolio. Paloma Partners is also relatively very bullish on the stock, earmarking 0.0029 percent of its 13F equity portfolio to SPI.
Consequently, specific money managers have jumped into SPI Energy Co., Ltd. (NASDAQ:SPI) headfirst. Sabby Capital, managed by Hal Mintz, initiated the biggest position in SPI Energy Co., Ltd. (NASDAQ:SPI). Sabby Capital had $1 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0.1 million investment in the stock during the quarter.
Let’s check out hedge fund activity in other stocks similar to SPI Energy Co., Ltd. (NASDAQ:SPI). These stocks are Overseas Shipholding Group, Inc. (NYSE:OSG), Movano Inc. (NASDAQ:MOVE), Medallion Financial Corp. (NASDAQ:MFIN), Battalion Oil Corporation (NYSE:BATL), OncoSec Medical Incorporated (NASDAQ:ONCS), Voyager Therapeutics, Inc. (NASDAQ:VYGR), and Protara Therapeutics, Inc. (NASDAQ:TARA). This group of stocks’ market caps match SPI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OSG | 10 | 49316 | -2 |
| MOVE | 1 | 244 | 1 |
| MFIN | 4 | 4344 | -1 |
| BATL | 5 | 110185 | 1 |
| ONCS | 8 | 6934 | -1 |
| VYGR | 9 | 24139 | 2 |
| TARA | 14 | 91477 | -2 |
| Average | 7.3 | 40948 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.3 hedge funds with bullish positions and the average amount invested in these stocks was $41 million. That figure was $2 million in SPI’s case. Protara Therapeutics, Inc. (NASDAQ:TARA) is the most popular stock in this table. On the other hand Movano Inc. (NASDAQ:MOVE) is the least popular one with only 1 bullish hedge fund positions. SPI Energy Co., Ltd. (NASDAQ:SPI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SPI is 51.4. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 17.4% in 2021 through June 18th and surpassed the market again by 6.1 percentage points. Unfortunately SPI wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); SPI investors were disappointed as the stock returned -9.3% since the end of March (through 6/18) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
Disclosure: None. This article was originally published at Insider Monkey.
