Hedge Funds Are Dumping DTE Energy Company (DTE)

In this article we will analyze whether DTE Energy Company (NYSE:DTE) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.

DTE Energy Company (NYSE:DTE) investors should be aware of a decrease in enthusiasm from smart money recently. DTE Energy Company (NYSE:DTE) was in 22 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 35. Our calculations also showed that DTE isn’t among the 30 most popular stocks among hedge funds (click for Q2 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. With all of this in mind we’re going to take a look at the key hedge fund action regarding DTE Energy Company (NYSE:DTE).

Michael Gelband of ExodusPoint Capital

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

Heading into the fourth quarter of 2021, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -31% from the second quarter of 2021. On the other hand, there were a total of 28 hedge funds with a bullish position in DTE a year ago. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were upping their stakes substantially (or already accumulated large positions).

The largest stake in DTE Energy Company (NYSE:DTE) was held by Citadel Investment Group, which reported holding $66.3 million worth of stock at the end of September. It was followed by D E Shaw with a $58 million position. Other investors bullish on the company included Renaissance Technologies, ExodusPoint Capital, and AQR Capital Management. In terms of the portfolio weights assigned to each position Coann Capital allocated the biggest weight to DTE Energy Company (NYSE:DTE), around 8.19% of its 13F portfolio. Socorro Asset Management is also relatively very bullish on the stock, designating 2.15 percent of its 13F equity portfolio to DTE.

Due to the fact that DTE Energy Company (NYSE:DTE) has witnessed bearish sentiment from hedge fund managers, logic holds that there was a specific group of money managers that elected to cut their entire stakes heading into Q4. Interestingly, John Petry’s Sessa Capital cut the biggest position of all the hedgies monitored by Insider Monkey, comprising an estimated $136.1 million in stock. Brandon Haley’s fund, Holocene Advisors, also said goodbye to its stock, about $25.9 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 10 funds heading into Q4.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as DTE Energy Company (NYSE:DTE) but similarly valued. These stocks are FleetCor Technologies, Inc. (NYSE:FLT), Dollar Tree, Inc. (NASDAQ:DLTR), TransUnion (NYSE:TRU), Mid America Apartment Communities Inc (NYSE:MAA), PPL Corporation (NYSE:PPL), Sun Communities Inc (NYSE:SUI), and Martin Marietta Materials, Inc. (NYSE:MLM). This group of stocks’ market caps are similar to DTE’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FLT 31 2095712 -9
DLTR 38 1215394 -4
TRU 38 2180644 3
MAA 22 254912 8
PPL 20 140767 -3
SUI 33 794559 3
MLM 42 2154281 8
Average 32 1262324 0.9

View table here if you experience formatting issues.

As you can see these stocks had an average of 32 hedge funds with bullish positions and the average amount invested in these stocks was $1262 million. That figure was $426 million in DTE’s case. Martin Marietta Materials, Inc. (NYSE:MLM) is the most popular stock in this table. On the other hand PPL Corporation (NYSE:PPL) is the least popular one with only 20 bullish hedge fund positions. DTE Energy Company (NYSE:DTE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for DTE is 18.4. 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. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. A small number of hedge funds were also right about betting on DTE as the stock returned 7.8% since the end of the third quarter (through 12/31) and outperformed the market by an even larger margin.

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