Is FirstEnergy Corp. (FE) A Good Stock To Buy?

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With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Balyasny Asset Management, managed by Dmitry Balyasny, initiated the most outsized call position in FirstEnergy Corp. (NYSE:FE). The fund had $18.8 million invested in the company at the end of the quarter. Ray Dalio’s Bridgewater Associates also initiated an $11.6 million position during the quarter. The following funds were also among the new FE investors: Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Paul Tudor Jones’s Tudor Investment Corp, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners.

Let’s also examine hedge fund activity in other stocks similar to FirstEnergy Corp. (NYSE:FE). These stocks are Workday Inc (NYSE:WDAY), Red Hat, Inc. (NYSE:RHT), Norwegian Cruise Line Holdings Ltd (NASDAQ:NCLH), and Loews Corporation (NYSE:L). All of these stocks’ market caps are similar to FE’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
WDAY 28 1019376 2
RHT 41 554846 1
NCLH 38 745372 0
L 19 1010435 -7

As you can see these stocks had an average of 32 hedge funds with bullish positions and the average amount invested in these stocks was $833 million. That figure was $558 million in FE’s case, not a positive signal. Red Hat, Inc. (NYSE:RHT) is the most popular stock in this table, while Loews Corporation (NYSE:L) is the laggard with only 19 bullish hedge fund positions. FirstEnergy Corp. (NYSE:FE) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard RHT might be a better candidate to consider a long position.

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