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Hedge Funds Are Dumping JinkoSolar Holding Co., Ltd. (JKS)

In this article you are going to find out whether hedge funds think JinkoSolar Holding Co., Ltd. (NYSE:JKS) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

Is JinkoSolar Holding Co., Ltd. (NYSE:JKS) a worthy investment today? The best stock pickers are becoming less hopeful. The number of bullish hedge fund bets fell by 5 lately. Our calculations also showed that JKS isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.

According to most traders, hedge funds are assumed to be unimportant, old investment vehicles of years past. While there are over 8000 funds with their doors open at present, Our experts look at the leaders of this club, about 850 funds. These hedge fund managers watch over the majority of all hedge funds’ total capital, and by keeping track of their unrivaled investments, Insider Monkey has formulated many investment strategies that have historically outperformed Mr. Market. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

Jonathan Barrett Luminus Management

Jonathan Barrett of Luminus Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s go over the key hedge fund action encompassing JinkoSolar Holding Co., Ltd. (NYSE:JKS).

How have hedgies been trading JinkoSolar Holding Co., Ltd. (NYSE:JKS)?

At Q1’s end, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -42% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards JKS over the last 18 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 increasing their holdings considerably (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, D E Shaw, managed by D. E. Shaw, holds the most valuable position in JinkoSolar Holding Co., Ltd. (NYSE:JKS). D E Shaw has a $16.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Luminus Management, managed by Jonathan Barrett and Paul Segal, which holds a $13.7 million position; the fund has 1.4% of its 13F portfolio invested in the stock. Remaining members of the smart money that are bullish include Israel Englander’s Millennium Management, and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position Luminus Management allocated the biggest weight to JinkoSolar Holding Co., Ltd. (NYSE:JKS), around 1.41% of its 13F portfolio. D E Shaw is also relatively very bullish on the stock, dishing out 0.03 percent of its 13F equity portfolio to JKS.

Seeing as JinkoSolar Holding Co., Ltd. (NYSE:JKS) has witnessed bearish sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of hedge funds that decided to sell off their positions entirely by the end of the first quarter. Interestingly, Leung Chi Kit’s Kadensa Capital cut the largest investment of all the hedgies watched by Insider Monkey, totaling about $12.3 million in stock. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, also said goodbye to its stock, about $1.9 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 5 funds by the end of the first quarter.

Let’s go over hedge fund activity in other stocks similar to JinkoSolar Holding Co., Ltd. (NYSE:JKS). These stocks are Cryolife Inc (NYSE:CRY), New Mountain Finance Corp. (NYSE:NMFC), Stock Yards Bancorp, Inc. (NASDAQ:SYBT), and PetIQ, Inc. (NASDAQ:PETQ). This group of stocks’ market valuations are closest to JKS’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CRY 7 35479 -3
NMFC 13 13539 -4
SYBT 7 12244 -1
PETQ 13 87376 -2
Average 10 37160 -2.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $37 million. That figure was $41 million in JKS’s case. New Mountain Finance Corp. (NYSE:NMFC) is the most popular stock in this table. On the other hand Cryolife Inc (NYSE:CRY) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks JinkoSolar Holding Co., Ltd. (NYSE:JKS) is even less popular than CRY. Hedge funds dodged a bullet by taking a bearish stance towards JKS. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but managed to beat the market by 14.2 percentage points. Unfortunately JKS wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); JKS investors were disappointed as the stock returned 22.5% during the second quarter (through June 10th) 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 so far in 2020.

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