What Does The Smart Money Think About First Solar, Inc. (FSLR)?

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is First Solar, Inc. (NASDAQ:FSLR), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Hedge fund interest in First Solar, Inc. (NASDAQ:FSLR) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that FSLR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). 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 Brookfield Renewable Partners L.P. (NYSE:BEP), Magellan Midstream Partners, L.P. (NYSE:MMP), and Service Corporation International (NYSE:SCI) to gather more data points.

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 let’s analyze the recent hedge fund action surrounding First Solar, Inc. (NASDAQ:FSLR).

Jeffrey Gendell of Tontine Asset Management

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

At the end of the third quarter, a total of 31 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards FSLR over the last 25 quarters. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).

Among these funds, Citadel Investment Group held the most valuable stake in First Solar, Inc. (NASDAQ:FSLR), which was worth $120.3 million at the end of the third quarter. On the second spot was Sandbar Asset Management which amassed $34.9 million worth of shares. Millennium Management, Lansdowne Partners, and Citadel Investment Group 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 Sandbar Asset Management allocated the biggest weight to First Solar, Inc. (NASDAQ:FSLR), around 3.79% of its 13F portfolio. Luminus Management is also relatively very bullish on the stock, earmarking 3.5 percent of its 13F equity portfolio to FSLR.

Since First Solar, Inc. (NASDAQ:FSLR) has experienced bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there were a few fund managers that slashed their positions entirely heading into Q4. Interestingly, Douglas Harold Hart Polunin’s Polunin Capital dropped the biggest investment of the 750 funds followed by Insider Monkey, comprising about $77.6 million in stock. Jos Shaver’s fund, Electron Capital Partners, also said goodbye to its stock, about $40.8 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s also examine hedge fund activity in other stocks similar to First Solar, Inc. (NASDAQ:FSLR). These stocks are Brookfield Renewable Partners L.P. (NYSE:BEP), Magellan Midstream Partners, L.P. (NYSE:MMP), Service Corporation International (NYSE:SCI), On Holding AG (NYSE:ONON), RPM International Inc. (NYSE:RPM), Molson Coors Beverage Company (NYSE:TAP), and Grifols SA (NASDAQ:GRFS). This group of stocks’ market caps are closest to FSLR’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 20.7 hedge funds with bullish positions and the average amount invested in these stocks was $282 million. That figure was $267 million in FSLR’s case. On Holding AG (NYSE:ONON) is the most popular stock in this table. On the other hand Magellan Midstream Partners, L.P. (NYSE:MMP) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks First Solar, Inc. (NASDAQ:FSLR) is more popular among hedge funds. Our overall hedge fund sentiment score for FSLR is 78.3. 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 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 FSLR as the stock returned 8.5% 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.