PG&E Corporation (PCG) Fell Out Of Favor With Hedge Funds

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article we look at what those investors think of PG&E Corporation (NYSE:PCG).

Is PG&E Corporation (NYSE:PCG) ready to rally soon? Money managers were cutting their exposure. The number of long hedge fund bets dropped by 10 in recent months. PG&E Corporation (NYSE:PCG) was in 54 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 92. Our calculations also showed that PCG isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 64 hedge funds in our database with PCG holdings at the end of June.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. With all of this in mind we’re going to view the latest hedge fund action surrounding PG&E Corporation (NYSE:PCG).

Stuart Zimmer of Zimmer Partners

Do Hedge Funds Think PCG Is A Good Stock To Buy Now?

At Q3’s end, a total of 54 of the hedge funds tracked by Insider Monkey were long this stock, a change of -16% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards PCG over the last 25 quarters. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

The largest stake in PG&E Corporation (NYSE:PCG) was held by Third Point, which reported holding $786.6 million worth of stock at the end of September. It was followed by Silver Point Capital with a $362.4 million position. Other investors bullish on the company included Zimmer Partners, Oaktree Capital Management, and Redwood Capital Management. In terms of the portfolio weights assigned to each position Silver Point Capital allocated the biggest weight to PG&E Corporation (NYSE:PCG), around 17.23% of its 13F portfolio. Redwood Capital Management is also relatively very bullish on the stock, dishing out 10.39 percent of its 13F equity portfolio to PCG.

Because PG&E Corporation (NYSE:PCG) has faced declining sentiment from the smart money, logic holds that there was a specific group of hedgies who were dropping their positions entirely last quarter. Interestingly, David Abrams’s Abrams Capital Management sold off the largest investment of the 750 funds tracked by Insider Monkey, totaling an estimated $215.4 million in stock, and Robert Pitts’s Steadfast Capital Management was right behind this move, as the fund dumped about $180.2 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 10 funds last quarter.

Let’s check out hedge fund activity in other stocks similar to PG&E Corporation (NYSE:PCG). These stocks are Bio-Techne Corporation (NASDAQ:TECH), Raymond James Financial, Inc. (NYSE:RJF), Burlington Stores Inc (NYSE:BURL), Restaurant Brands International Inc (NYSE:QSR), Avangrid, Inc. (NYSE:AGR), Tradeweb Markets Inc. (NASDAQ:TW), and Tyler Technologies, Inc. (NYSE:TYL). All of these stocks’ market caps match PCG’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 27.6 hedge funds with bullish positions and the average amount invested in these stocks was $837 million. That figure was $3825 million in PCG’s case. Burlington Stores Inc (NYSE:BURL) is the most popular stock in this table. On the other hand Avangrid, Inc. (NYSE:AGR) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks PG&E Corporation (NYSE:PCG) is more popular among hedge funds. Our overall hedge fund sentiment score for PCG is 62.6. 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. 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 returned 28.6% in 2021 through November 30th but still managed to beat the market by 5.6 percentage points. Hedge funds were also right about betting on PCG as the stock returned 23.8% since the end of September (through 11/30) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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Disclosure: None. This article was originally published at Insider Monkey.