We at Insider Monkey have gone over 742 13F filings that hedge funds and prominent investors are required to file by the government. The 13F filings show the funds’ and investors’ portfolio positions as of September 30. In this article, we look at what those funds think of AES Corp (NYSE:AES) based on that data.
Is AES Corp (NYSE:AES) ready to rally soon? The smart money is in an optimistic mood. The number of long hedge fund bets increased by 3 recently. 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 Synopsys, Inc. (NASDAQ:SNPS), Harley-Davidson, Inc. (NYSE:HOG), and Regency Centers Corp (NYSE:REG) to gather more data points.
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.
How are hedge funds trading AES Corp (NYSE:AES)?
Heading into the fourth quarter of 2016, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a gain of 16% from one quarter earlier. However, smart money ownership remains well off its yearly high of 30 hedge funds. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Adage Capital Management, managed by Phill Gross and Robert Atchinson, holds the most valuable position in The AES Corporation (NYSE:AES). Adage Capital Management has a $40.6 million position in the stock. The second largest stake is held by Cliff Asness of AQR Capital Management, with a $14 million position. Some other professional money managers with similar optimism comprise Jim Simons’ Renaissance Technologies, Mario Gabelli’s GAMCO Investors and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
As aggregate interest increased, some big names were breaking ground themselves. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, established the most valuable position in AES Corp (NYSE:AES). Marshall Wace LLP had $5.4 million invested in the company at the end of the quarter. Alex Snow’s Lansdowne Partners also initiated a $5.3 million position during the quarter. The following funds were also among the new AES investors: David Costen Haley’s HBK Investments, Mike Vranos’ Ellington, and Ken Griffin’s Citadel Investment Group.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as AES Corp (NYSE:AES) but similarly valued. We will take a look at Synopsys, Inc. (NASDAQ:SNPS), Harley-Davidson, Inc. (NYSE:HOG), Regency Centers Corp (NYSE:REG), and Coca-Cola Enterprises Inc (NYSE:CCE). All of these stocks’ market caps resemble AES’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $521 million. That figure was $108 million in AES’s case. Coca-Cola Enterprises Inc (NYSE:CCE) is the most popular stock in this table. On the other hand Regency Centers Corp (NYSE:REG) is the least popular one with only 11 bullish hedge fund positions. AES Corp (NYSE:AES) 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 CCE might be a better candidate to consider a long position in.