Do Hedge Funds Love Eversource Energy (ES)?

Does Eversource Energy (NYSE:ES) represent a good buying opportunity at the moment? Let’s briefly check the hedge fund interest towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail inconceivably on some occasions, but their stock picks have been generating superior risk-adjusted returns on average over the years.

Eversource Energy (NYSE:ES) has seen an increase in hedge fund interest recently. ES was in 19 hedge funds’ portfolios at the end of September. There were 15 hedge funds in our database with ES holdings at the end of the previous quarter. Our calculations also showed that es isn’t among the 30 most popular stocks among hedge funds.

In the 21st century investor’s toolkit there are numerous signals stock market investors use to analyze publicly traded companies. A pair of the best signals are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the top picks of the best fund managers can outclass the broader indices by a solid amount (see the details here).


Cliff Asness of AQR Capital Management

We’re going to take a peek at the latest hedge fund action regarding Eversource Energy (NYSE:ES).

What does the smart money think about Eversource Energy (NYSE:ES)?

At the end of the third quarter, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 27% from one quarter earlier. By comparison, 12 hedge funds held shares or bullish call options in ES heading into this year. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).

No of Hedge Funds with ES Positions

Among these funds, Renaissance Technologies held the most valuable stake in Eversource Energy (NYSE:ES), which was worth $230.4 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $152.3 million worth of shares. Moreover, Adage Capital Management, Zimmer Partners, and AQR Capital Management were also bullish on Eversource Energy (NYSE:ES), allocating a large percentage of their portfolios to this stock.

As aggregate interest increased, key money managers have been driving this bullishness. Carlson Capital, managed by Clint Carlson, initiated the largest position in Eversource Energy (NYSE:ES). Carlson Capital had $29.6 million invested in the company at the end of the quarter. Sara Nainzadeh’s Centenus Global Management also made a $16 million investment in the stock during the quarter. The other funds with new positions in the stock are Charles Davidson and Joseph Jacobs’s Wexford Capital, Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital, and George Hall’s Clinton Group.

Let’s now review hedge fund activity in other stocks similar to Eversource Energy (NYSE:ES). We will take a look at Dollar Tree, Inc. (NASDAQ:DLTR), Ventas, Inc. (NYSE:VTR), Dell Technologies Inc. (NYSE:DVMT), and The Clorox Company (NYSE:CLX). This group of stocks’ market valuations resemble ES’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DLTR 53 1885624 5
VTR 15 224805 0
DVMT 61 6285474 -5
CLX 22 999862 12
Average 37.75 2348941 3

View table here if you experience formatting issues.

As you can see these stocks had an average of 37.75 hedge funds with bullish positions and the average amount invested in these stocks was $2.35 billion. That figure was $708 million in ES’s case. Dell Technologies Inc. (NYSE:DVMT) is the most popular stock in this table. On the other hand Ventas, Inc. (NYSE:VTR) is the least popular one with only 15 bullish hedge fund positions. Eversource Energy (NYSE:ES) 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 DVMT might be a better candidate to consider a long position.

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