Hedge Funds Are Betting On Xcel Energy Inc (XEL)

After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Xcel Energy Inc (NASDAQ:XEL).

Xcel Energy Inc (NASDAQ:XEL) shareholders have witnessed an increase in activity from the world’s largest hedge funds in recent months. Xcel Energy Inc (NASDAQ:XEL) was in 26 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 28. Our calculations also showed that XEL isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind let’s take a gander at the key hedge fund action surrounding Xcel Energy Inc (NASDAQ:XEL).

Do Hedge Funds Think XEL Is A Good Stock To Buy Now?

At the end of the third quarter, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 18% from the previous quarter. On the other hand, there were a total of 22 hedge funds with a bullish position in XEL a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Millennium Management, managed by Israel Englander, holds the largest position in Xcel Energy Inc (NASDAQ:XEL). Millennium Management has a $135.3 million position in the stock, comprising 0.1% of its 13F portfolio. The second most bullish fund manager is Renaissance Technologies, holding a $111.2 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining members of the smart money that are bullish comprise Cliff Asness’s AQR Capital Management, Phill Gross and Robert Atchinson’s Adage Capital Management and Greg Poole’s Echo Street Capital Management. In terms of the portfolio weights assigned to each position Coann Capital allocated the biggest weight to Xcel Energy Inc (NASDAQ:XEL), around 8.99% of its 13F portfolio. Covalis Capital is also relatively very bullish on the stock, designating 3.54 percent of its 13F equity portfolio to XEL.

Consequently, key money managers were breaking ground themselves. Adage Capital Management, managed by Phill Gross and Robert Atchinson, assembled the most valuable position in Xcel Energy Inc (NASDAQ:XEL). Adage Capital Management had $32.5 million invested in the company at the end of the quarter. Zilvinas Mecelis’s Covalis Capital also initiated a $15.3 million position during the quarter. The other funds with brand new XEL positions are Matthew Davis’s Coann Capital, Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management, and Brandon Haley’s Holocene Advisors.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Xcel Energy Inc (NASDAQ:XEL) but similarly valued. We will take a look at The Trade Desk, Inc. (NASDAQ:TTD), Archer Daniels Midland Company (NYSE:ADM), Old Dominion Freight Line (NASDAQ:ODFL), Copart, Inc. (NASDAQ:CPRT), Pinterest, Inc. (NYSE:PINS), Waste Connections, Inc. (NYSE:WCN), and CBRE Group, Inc. (NYSE:CBRE). This group of stocks’ market valuations resemble XEL’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 35.4 hedge funds with bullish positions and the average amount invested in these stocks was $1207 million. That figure was $498 million in XEL’s case. Pinterest, Inc. (NYSE:PINS) is the most popular stock in this table. On the other hand The Trade Desk, Inc. (NASDAQ:TTD) is the least popular one with only 19 bullish hedge fund positions. Xcel Energy Inc (NASDAQ:XEL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for XEL is 45.8. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 31.1% in 2021 through December 9th and surpassed the market again by 5.1 percentage points. Unfortunately XEL wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); XEL investors were disappointed as the stock returned 6.9% since the end of September (through 12/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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