Where Do Hedge Funds Stand On Korea Electric Power Corporation (KEP)?

At Insider Monkey, we pore over the filings of nearly 817 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Korea Electric Power Corporation (NYSE:KEP) makes for a good investment right now.

Is Korea Electric Power Corporation (NYSE:KEP) the right pick for your portfolio? Prominent investors were in a bullish mood. The number of bullish hedge fund positions went up by 2 lately. Korea Electric Power Corporation (NYSE:KEP) was in 5 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 14. Our calculations also showed that KEP isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 3 hedge funds in our database with KEP positions at the end of the second quarter.

Video: Watch our video about the top 5 most popular hedge fund stocks.

To most investors, hedge funds are viewed as underperforming, outdated financial tools of the past. While there are over 8000 funds in operation at the moment, Our researchers choose to focus on the bigwigs of this club, approximately 850 funds. These investment experts direct the lion’s share of all hedge funds’ total asset base, and by keeping track of their top equity investments, Insider Monkey has uncovered numerous investment strategies that have historically exceeded the broader indices. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .

Ken Griffin of Citadel Investment Group

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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. Now we’re going to review the fresh hedge fund action surrounding Korea Electric Power Corporation (NYSE:KEP).

What does smart money think about Korea Electric Power Corporation (NYSE:KEP)?

Heading into the fourth quarter of 2020, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 67% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in KEP over the last 21 quarters. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

Among these funds, Kopernik Global Investors held the most valuable stake in Korea Electric Power Corporation (NYSE:KEP), which was worth $19.2 million at the end of the third quarter. On the second spot was Arrowstreet Capital which amassed $1.1 million worth of shares. Citadel Investment Group, Weiss Asset Management, 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 Kopernik Global Investors allocated the biggest weight to Korea Electric Power Corporation (NYSE:KEP), around 2.98% of its 13F portfolio. Weiss Asset Management is also relatively very bullish on the stock, setting aside 0.01 percent of its 13F equity portfolio to KEP.

Consequently, specific money managers were leading the bulls’ herd. Citadel Investment Group, managed by Ken Griffin, created the largest position in Korea Electric Power Corporation (NYSE:KEP). Citadel Investment Group had $0.5 million invested in the company at the end of the quarter. Andrew Weiss’s Weiss Asset Management also made a $0.2 million investment in the stock during the quarter. The only other fund with a brand new KEP position is D. E. Shaw’s D E Shaw.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Korea Electric Power Corporation (NYSE:KEP) but similarly valued. We will take a look at Equity Lifestyle Properties, Inc. (NYSE:ELS), Gartner Inc (NYSE:IT), Nordson Corporation (NASDAQ:NDSN), Guardant Health, Inc. (NASDAQ:GH), Kinross Gold Corporation (NYSE:KGC), Brookfield Property Partners LP (NYSE:BPY), and Regions Financial Corporation (NYSE:RF). This group of stocks’ market values resemble KEP’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 26.9 hedge funds with bullish positions and the average amount invested in these stocks was $583 million. That figure was $21 million in KEP’s case. Guardant Health, Inc. (NASDAQ:GH) is the most popular stock in this table. On the other hand Brookfield Property Partners LP (NYSE:BPY) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Korea Electric Power Corporation (NYSE:KEP) is even less popular than BPY. Our overall hedge fund sentiment score for KEP is 17.7. 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. Hedge funds clearly dropped the ball on KEP as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on KEP as the stock returned 11.8% since Q3 (through November 27th) and outperformed the market by an even larger margin.

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