The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded Portland General Electric Company (NYSE:POR) and determine whether the smart money was really smart about this stock.
Portland General Electric Company (NYSE:POR) has experienced a decrease in support from the world’s most elite money managers recently. Portland General Electric Company (NYSE:POR) was in 21 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 27. There were 23 hedge funds in our database with POR positions at the end of the first quarter. Our calculations also showed that POR isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 56 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost precious metals prices. So, we are checking out this lithium company which could also benefit from the electric car adoption. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website to get excerpts of these letters in your inbox. Keeping this in mind let’s take a peek at the latest hedge fund action regarding Portland General Electric Company (NYSE:POR).
How are hedge funds trading Portland General Electric Company (NYSE:POR)?
At Q2’s end, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of -9% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards POR over the last 20 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
The largest stake in Portland General Electric Company (NYSE:POR) was held by Renaissance Technologies, which reported holding $100.4 million worth of stock at the end of September. It was followed by Millennium Management with a $19.4 million position. Other investors bullish on the company included Two Sigma Advisors, AQR Capital Management, and D E Shaw. In terms of the portfolio weights assigned to each position Newtyn Management allocated the biggest weight to Portland General Electric Company (NYSE:POR), around 1.68% of its 13F portfolio. Huber Capital Management is also relatively very bullish on the stock, dishing out 0.63 percent of its 13F equity portfolio to POR.
Since Portland General Electric Company (NYSE:POR) has faced falling interest from the entirety of the hedge funds we track, it’s safe to say that there lies a certain “tier” of hedge funds that decided to sell off their positions entirely by the end of the second quarter. Intriguingly, David Harding’s Winton Capital Management cut the largest investment of all the hedgies monitored by Insider Monkey, comprising close to $2.5 million in stock. Steve Cohen’s fund, Point72 Asset Management, also sold off its stock, about $1.6 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 2 funds by the end of the second quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Portland General Electric Company (NYSE:POR). We will take a look at Perspecta Inc. (NYSE:PRSP), BRP Inc. (NASDAQ:DOOO), Curtiss-Wright Corp. (NYSE:CW), YETI Holdings, Inc. (NYSE:YETI), Flowserve Corporation (NYSE:FLS), Grocery Outlet Holding Corp. (NASDAQ:GO), and Tempur Sealy International Inc. (NYSE:TPX). This group of stocks’ market caps resemble POR’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 29 hedge funds with bullish positions and the average amount invested in these stocks was $376 million. That figure was $165 million in POR’s case. Perspecta Inc. (NYSE:PRSP) is the most popular stock in this table. On the other hand BRP Inc. (NASDAQ:DOOO) is the least popular one with only 14 bullish hedge fund positions. Portland General Electric Company (NYSE:POR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for POR is 37.3. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 24.8% in 2020 through the end of September and surpassed the market by 19.3 percentage points. Unfortunately POR wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); POR investors were disappointed as the stock returned -14.1% in the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.