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Hedge Funds Are Crazy About SolarCity Corp (SCTY)

Is SolarCity Corp (NASDAQ:SCTY) a good investment?

If you were to ask many of your fellow readers, hedge funds are viewed as useless, old investment tools of a period lost to current times. Although there are more than 8,000 hedge funds in operation in present day, this site looks at the bigwigs of this club, close to 525 funds. Analysts calculate that this group oversees most of the smart money’s total capital, and by monitoring their highest quality equity investments, we’ve figured out a few investment strategies that have historically beaten the S&P 500. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 33 percentage points in 11 months (find the details here).

 SolarCity Corp (NASDAQ:SCTY)

Just as useful, positive insider trading activity is another way to look at the world of equities. Just as you’d expect, there are a number of incentives for an upper level exec to get rid of shares of his or her company, but just one, very clear reason why they would buy. Many empirical studies have demonstrated the market-beating potential of this strategy if “monkeys” know where to look (learn more here).

Thus, we’re going to discuss the recent info about SolarCity Corp (NASDAQ:SCTY).

How are hedge funds trading SolarCity Corp (NASDAQ:SCTY)?

Heading into Q3, a total of 9 of the hedge funds we track were bullish in this stock, a change of 13% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their stakes considerably.

Out of the hedge funds we follow, Generation Investment Management, managed by David Blood and Al Gore, holds the biggest position in SolarCity Corp (NASDAQ:SCTY). Generation Investment Management has a $159.8 million position in the stock, comprising 3.1% of its 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $10.1 million call position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include Matthew Hulsizer’s PEAK6 Capital Management, and Donald Chiboucis’s Columbus Circle Investors.

Now, certain money managers were leading the bulls’ herd. Generation Investment Management, managed by David Blood and Al Gore, assembled the largest position in SolarCity Corp (NASDAQ:SCTY). Generation Investment Management had 159.8 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $10.1 million position during the quarter. The other funds with brand new SCTY positions are Matthew Hulsizer’s PEAK6 Capital Management, D. E. Shaw’s D E Shaw, and Donald Chiboucis’s Columbus Circle Investors.

What do corporate executives and insiders think about SolarCity Corp (NASDAQ:SCTY)?

Bullish insider trading is at its handiest when the company we’re looking at has seen transactions within the past 180 days. Over the last six-month time frame, SolarCity Corp (NASDAQ:SCTY) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also take a look at the relationship between both of these indicators in other stocks similar to SolarCity Corp (NASDAQ:SCTY). These stocks are Monolithic Power Systems, Inc. (NASDAQ:MPWR), Himax Technologies, Inc. (ADR) (NASDAQ:HIMX), SunPower Corporation (NASDAQ:SPWR), Silicon Laboratories (NASDAQ:SLAB), and Cirrus Logic, Inc. (NASDAQ:CRUS). This group of stocks belong to the semiconductor – specialized industry and their market caps resemble SCTY’s market cap.