Xcel Energy Inc (XEL): Hedge Funds Taking Some Chips Off The Table

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 823 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 June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded Xcel Energy Inc (NASDAQ:XEL) and determine whether the smart money was really smart about this stock.

Is Xcel Energy Inc (NASDAQ:XEL) a buy right now? Investors who are in the know were in a pessimistic mood. The number of long hedge fund bets decreased by 1 in recent months. Xcel Energy Inc (NASDAQ:XEL) was in 23 hedge funds’ portfolios at the end of June. The all time high for this statistics is 24. Our calculations also showed that XEL 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.

Today there are dozens of methods market participants put to use to size up stocks. A duo of the most under-the-radar methods are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the top picks of the top money managers can trounce the broader indices by a significant margin (see the details here).

Phillip Gross of Adage Capital

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 after its stock price crashed. 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. Keeping this in mind we’re going to take a gander at the new hedge fund action regarding Xcel Energy Inc (NASDAQ:XEL).

How have hedgies been trading Xcel Energy Inc (NASDAQ:XEL)?

At Q2’s end, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -4% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards XEL over the last 20 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).

The largest stake in Xcel Energy Inc (NASDAQ:XEL) was held by Renaissance Technologies, which reported holding $81.2 million worth of stock at the end of September. It was followed by AQR Capital Management with a $53.8 million position. Other investors bullish on the company included Adage Capital Management, Citadel Investment Group, and D E Shaw. In terms of the portfolio weights assigned to each position Sciencast Management allocated the biggest weight to Xcel Energy Inc (NASDAQ:XEL), around 0.98% of its 13F portfolio. Quantamental Technologies is also relatively very bullish on the stock, earmarking 0.21 percent of its 13F equity portfolio to XEL.

Since Xcel Energy Inc (NASDAQ:XEL) has witnessed a decline in interest from the smart money, logic holds that there were a few money managers who sold off their positions entirely last quarter. Interestingly, Clint Carlson’s Carlson Capital dumped the largest stake of the 750 funds monitored by Insider Monkey, valued at about $16.1 million in stock, and George Soros’s Soros Fund Management was right behind this move, as the fund said goodbye to about $2.7 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 1 funds last quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Xcel Energy Inc (NASDAQ:XEL) but similarly valued. We will take a look at HCA Healthcare Inc (NYSE:HCA), NXP Semiconductors NV (NASDAQ:NXPI), DocuSign, Inc. (NASDAQ:DOCU), Splunk Inc (NASDAQ:SPLK), Orange SA (NYSE:ORAN), Phillips 66 (NYSE:PSX), and Mizuho Financial Group Inc. (NYSE:MFG). All of these stocks’ market caps are closest to XEL’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 42.4 hedge funds with bullish positions and the average amount invested in these stocks was $1186 million. That figure was $273 million in XEL’s case. HCA Healthcare Inc (NYSE:HCA) is the most popular stock in this table. On the other hand Orange SA (NYSE:ORAN) is the least popular one with only 3 bullish hedge fund positions. Xcel Energy Inc (NASDAQ:XEL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for XEL is 47.5. 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 24.8% in 2020 through the end of September and beat the market by 19.3 percentage points. A small number of hedge funds were also right about betting on XEL, though not to the same extent, as the stock returned 11.1% during Q3 and outperformed the market.

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