Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the second quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of DTE Energy Company (NYSE:DTE) based on that data and determine whether they were really smart about the stock.
Is DTE Energy Company (NYSE:DTE) an exceptional stock to buy now? Investors who are in the know were reducing their bets on the stock. The number of bullish hedge fund bets fell by 5 lately. DTE Energy Company (NYSE:DTE) was in 24 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 35. Our calculations also showed that DTE isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most stock holders, hedge funds are seen as underperforming, outdated investment vehicles of the past. While there are over 8000 funds with their doors open today, Our researchers choose to focus on the leaders of this club, about 850 funds. It is estimated that this group of investors command the lion’s share of all hedge funds’ total capital, and by following their matchless investments, Insider Monkey has unearthed several investment strategies that have historically outpaced the broader indices. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 34% since February 2017 (through August 17th) even though the market was up 53% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Gavin Saitowitz of Prelude Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. Now let’s review the key hedge fund action surrounding DTE Energy Company (NYSE:DTE).
How are hedge funds trading DTE Energy Company (NYSE:DTE)?
At the end of June, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of -17% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards DTE over the last 20 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Two Sigma Advisors held the most valuable stake in DTE Energy Company (NYSE:DTE), which was worth $67.4 million at the end of the third quarter. On the second spot was AQR Capital Management which amassed $66.2 million worth of shares. Citadel Investment Group, Renaissance Technologies, and D E Shaw were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Ecofin Ltd allocated the biggest weight to DTE Energy Company (NYSE:DTE), around 1.76% of its 13F portfolio. BlueCrest Capital Mgmt. is also relatively very bullish on the stock, setting aside 0.78 percent of its 13F equity portfolio to DTE.
Seeing as DTE Energy Company (NYSE:DTE) has faced a decline in interest from hedge fund managers, it’s safe to say that there is a sect of hedge funds that slashed their entire stakes by the end of the second quarter. At the top of the heap, Steve Pattyn’s Yaupon Capital cut the biggest stake of all the hedgies tracked by Insider Monkey, comprising an estimated $2.4 million in stock, and Matthew Hulsizer’s PEAK6 Capital Management was right behind this move, as the fund sold off about $1.6 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 5 funds by the end of the second quarter.
Let’s now take a look at hedge fund activity in other stocks similar to DTE Energy Company (NYSE:DTE). These stocks are New Oriental Education & Technology Group Inc. (NYSE:EDU), Canadian Natural Resources Limited (NYSE:CNQ), AMETEK, Inc. (NYSE:AME), AmerisourceBergen Corporation (NYSE:ABC), Carvana Co. (NYSE:CVNA), Alexandria Real Estate Equities Inc (NYSE:ARE), and Realty Income Corporation (NYSE:O). This group of stocks’ market values match DTE’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EDU | 39 | 1378683 | -3 |
| CNQ | 28 | 556305 | 2 |
| AME | 40 | 952884 | 7 |
| ABC | 40 | 646674 | -1 |
| CVNA | 57 | 3587877 | 5 |
| ARE | 18 | 53382 | -11 |
| O | 17 | 185310 | -8 |
| Average | 34.1 | 1051588 | -1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 34.1 hedge funds with bullish positions and the average amount invested in these stocks was $1052 million. That figure was $384 million in DTE’s case. Carvana Co. (NYSE:CVNA) is the most popular stock in this table. On the other hand Realty Income Corporation (NYSE:O) is the least popular one with only 17 bullish hedge fund positions. DTE Energy Company (NYSE:DTE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for DTE is 29.3. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 21.3% in 2020 through September 25th and beat the market by 17.7 percentage points. A small number of hedge funds were also right about betting on DTE, though not to the same extent, as the stock returned 7.6% so far during Q3 and outperformed the market.
Follow Dte Energy Co (NYSE:DTE)
Follow Dte Energy Co (NYSE:DTE)
Disclosure: None. This article was originally published at Insider Monkey.
