Hedge funds and other investment firms that we track manage billions of dollars of their wealthy clients’ money, and needless to say, they are painstakingly thorough when analyzing where to invest this money, as their own wealth depends on it. Regardless of the various methods used by elite investors like David Tepper and Dan Loeb, the resources they expend are second-to-none. This is especially valuable when it comes to small-cap stocks, which is where they generate their strongest outperformance, as their resources give them a huge edge when it comes to studying these stocks compared to the average investor, which is why we intently follow their activity in the small-cap space.
Is TerraForm Power Inc (NASDAQ:TERP) the right investment to pursue these days? Money managers are taking a bearish view. The number of bullish hedge fund positions were trimmed by 15 recently. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Cabot Corp (NYSE:CBT), Belden Inc. (NYSE:BDC), and Corporate Office Properties Trust (NYSE:OFC) to gather more data points.
Follow Terraform Power Inc. (NASDAQ:TERP)
Follow Terraform Power Inc. (NASDAQ:TERP)
Keeping this in mind, let’s check out the latest action regarding TerraForm Power Inc (NASDAQ:TERP).
What have hedge funds been doing with TerraForm Power Inc (NASDAQ:TERP)?
Heading into Q4, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -33% from the second quarter. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Blue Mountain Capital, managed by Andrew Feldstein and Stephen Siderow, holds the number one position in TerraForm Power Inc (NASDAQ:TERP). Blue Mountain Capital has a $72.1 million position in the stock, comprising 1.3% of its 13F portfolio. Sitting at the No. 2 spot is Luxor Capital Group, managed by Christian Leone, which holds a $66.3 million position; 1.5% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions contain Phill Gross and Robert Atchinson’s Adage Capital Management, Rishi Bajaj, Toby Symonds, and Steve Tesoriere’s Altai Capital and Frank Brosens’s Taconic Capital.
Due to the fact that TerraForm Power Inc (NASDAQ:TERP) has witnessed declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there lies a certain “tier” of funds who sold off their positions entirely last quarter. Intriguingly, David Gallo’s Valinor Management LLC dumped the largest stake of the “upper crust” of funds tracked by Insider Monkey, totaling about $44 million in stock, and Stuart J. Zimmer’s Zimmer Partners was right behind this move, as the fund dropped about $41.6 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 15 funds last quarter.
Let’s go over hedge fund activity in other stocks similar to TerraForm Power Inc (NASDAQ:TERP). These stocks are Cabot Corp (NYSE:CBT), Belden Inc. (NYSE:BDC), Corporate Office Properties Trust (NYSE:OFC), and Glacier Bancorp, Inc. (NASDAQ:GBCI). This group of stocks’ market valuations are closest to TERP’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CBT | 28 | 145775 | -1 |
| BDC | 22 | 106931 | 9 |
| OFC | 16 | 99669 | -2 |
| GBCI | 11 | 118275 | -3 |
As you can see these stocks had an average of 19.25 hedge funds with bullish positions and the average amount invested in these stocks was $118 million. That figure was $477 million in TERP’s case. Cabot Corp (NYSE:CBT) is the most popular stock in this table. On the other hand Glacier Bancorp, Inc. (NASDAQ:GBCI) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks TerraForm Power Inc (NASDAQ:TERP) 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.
