Hedge Funds Are Dumping The Southern Company (SO)

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Seeing as The Southern Company (NYSE:SO) has witnessed declining sentiment from the smart money, it’s easy to see that there exists a select few money managers who sold off their positions entirely last quarter. Intriguingly, Stuart J. Zimmer’s Zimmer Partners sold off the biggest stake of all the hedgies followed by Insider Monkey, comprising an estimated $50.3 million worth of stock. Benjamin A. Smith’s fund, Laurion Capital Management, also sold off its stock, about $6.3 million in shares. These transactions are intriguing to say the least, as total hedge fund interest dropped by 2 funds last quarter.

Let’s also examine hedge fund activity in other stocks similar to The Southern Company (NYSE:SO). These stocks are Carnival Corporation (NYSE:CCL), Itau Unibanco Holding SA (ADR) (NYSE:ITUB), EOG Resources Inc (NYSE:EOG), and Monsanto Company (NYSE:MON). This group of stocks’ market caps are closest to SO’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CCL 53 2125468 4
ITUB 18 264160 -5
EOG 60 1539301 3
MON 60 3048446 -4

As you can see these stocks had an average of 48 hedge funds with bullish positions and the average amount invested in these stocks was $1.74 billion. That figure was just $361 million in SO’s case. Monsanto Company (NYSE:MON) and EOG Resources Inc (NYSE:EOG) are the crowd’s favorites, while Itau Unibanco Holding SA (ADR) (NYSE:ITUB) is the outsider with only 18 bullish hedge fund positions. Compared to these stocks The Southern Company (NYSE:SO) is even less popular than ITUB. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

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