Was The Smart Money Right About WEC Energy Group, Inc. (WEC)?

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. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded WEC Energy Group, Inc. (NYSE:WEC) and determine whether the smart money was really smart about this stock.

Is WEC Energy Group, Inc. (NYSE:WEC) a bargain? Money managers were in a bullish mood. The number of long hedge fund bets advanced by 4 recently. WEC Energy Group, Inc. (NYSE:WEC) was in 31 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic was previously 30. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that WEC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

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 review the recent hedge fund action encompassing WEC Energy Group, Inc. (NYSE:WEC).

Sander Gerber of Hudson Bay Capital

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

Heading into the fourth quarter of 2021, a total of 31 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 15% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in WEC over the last 25 quarters. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

Among these funds, Millennium Management held the most valuable stake in WEC Energy Group, Inc. (NYSE:WEC), which was worth $94.5 million at the end of the third quarter. On the second spot was AQR Capital Management which amassed $57.6 million worth of shares. D E Shaw, Renaissance Technologies, and Point72 Asset Management 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 Coann Capital allocated the biggest weight to WEC Energy Group, Inc. (NYSE:WEC), around 3.67% of its 13F portfolio. Zimmer Partners is also relatively very bullish on the stock, setting aside 0.44 percent of its 13F equity portfolio to WEC.

Now, some big names have been driving this bullishness. Point72 Asset Management, managed by Steve Cohen, created the most outsized position in WEC Energy Group, Inc. (NYSE:WEC). Point72 Asset Management had $40.2 million invested in the company at the end of the quarter. Sander Gerber’s Hudson Bay Capital Management also initiated a $2.5 million position during the quarter. The following funds were also among the new WEC investors: Brad Dunkley and Blair Levinsky’s Waratah Capital Advisors, Ran Pang’s Quantamental Technologies, and Joel Greenblatt’s Gotham Asset Management.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as WEC Energy Group, Inc. (NYSE:WEC) but similarly valued. These stocks are Occidental Petroleum Corporation (NYSE:OXY), Zebra Technologies Corporation (NASDAQ:ZBRA), PACCAR Inc (NASDAQ:PCAR), Delta Air Lines, Inc. (NYSE:DAL), Skyworks Solutions Inc (NASDAQ:SWKS), Bill.com Holdings, Inc. (NYSE:BILL), and Li Auto Inc. (NASDAQ:LI). All of these stocks’ market caps resemble WEC’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 42.3 hedge funds with bullish positions and the average amount invested in these stocks was $1678 million. That figure was $432 million in WEC’s case. Bill.com Holdings, Inc. (NYSE:BILL) is the most popular stock in this table. On the other hand Li Auto Inc. (NASDAQ:LI) is the least popular one with only 20 bullish hedge fund positions. WEC Energy Group, Inc. (NYSE:WEC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for WEC is 51.2. 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 gained 29.6% in 2021 and still beat the market by 3.6 percentage points. A small number of hedge funds were also right about betting on WEC as the stock returned 10.9% since the end of the third quarter (through 1/31) and outperformed the market by an even larger margin.

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