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Duke Energy Corp (DUK): Not Doing Enough to Attract Smart Money

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Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Duke Energy Corp (NYSE:DUK).

Is Duke Energy Corp (NYSE:DUK) an outstanding investment right now? Money managers are in an optimistic mood. The number of long hedge fund positions went up by 1 lately. At the end of this article we will also compare DUK to other stocks including The Bank of Nova Scotia (USA) (NYSE:BNS), Eni SpA (ADR) (NYSE:E), and National Grid plc (ADR) (NYSE:NGG) to get a better sense of its popularity.

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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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What have hedge funds been doing with Duke Energy Corp (NYSE:DUK)?

Heading into the fourth quarter of 2016, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a bump of 6% from one quarter earlier. Hedge fund ownership of DUK has been volatile over the past year, particularly in Q4 2015 and Q1 2016. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).

HedgeFundSentimentChart

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Jim Simons’ Renaissance Technologies has the biggest position in Duke Energy Corp (NYSE:DUK), worth close to $262.8 million. The second largest stake is held by Zimmer Partners, managed by Stuart J. Zimmer, which holds a $111.6 million position; 3% of its 13F portfolio is allocated to the company. Other professional money managers that are bullish comprise Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Jonathan Barrett and Paul Segal’s Luminus Management and Cliff Asness’ AQR Capital Management.

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