CenterPoint Energy, Inc. (CNP): Hedge Funds Are Buying, Should You?

Seeing as CenterPoint Energy, Inc. (NYSE:CNP) has witnessed a declination in interest from hedge fund managers, it’s easy to see that there is a sect of hedge funds who were dropping their entire stakes in the third quarter. Intriguingly, David Harding’s Winton Capital Management sold off the largest investment of all the hedgies followed by Insider Monkey, comprising an estimated $7.6 million in stock, and Peter Muller’s PDT Partners was right behind this move, as the fund dropped about $6.2 million worth of shares. These bearish behaviors are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s go over hedge fund activity in other stocks similar to CenterPoint Energy, Inc. (NYSE:CNP). These stocks are AMERCO (NASDAQ:UHAL), Hertz Global Holdings, Inc. (NYSE:HTZ), Everest Re Group Ltd (NYSE:RE), and CDK Global Inc (NASDAQ:CDK). This group of stocks’ market values resembles CenterPoint Energy, Inc. (NYSE:CNP)’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
UHAL 27 290247 5
HTZ 54 3484224 -13
RE 27 735366 3
CDK 41 2736058 -4

As you can see, these stocks had an average of 37 hedge funds with bullish positions and the average amount invested in these stocks was $1.81 billion. That figure was $267 million in CenterPoint Energy, Inc. (NYSE:CNP)’s case. Hertz Global Holdings, Inc. (NYSE:HTZ) is the most popular stock in this table. On the other hand, AMERCO (NASDAQ:UHAL) is the least popular one with only 27 bullish hedge fund positions. Compared to these stocks, CenterPoint Energy, Inc. (NYSE:CNP) is even less popular than AMERCO (NASDAQ:UHAL). Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case, more research is warranted.