Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.
Nextera Energy Partners LP (NYSE:NEP) investors should pay attention to an increase in support from the world’s most elite money managers of late, with a net total of 1 more hedge fund owning the stock. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Colliers International Group Inc (NASDAQ:CIGI), SeaWorld Entertainment Inc (NYSE:SEAS), and CYS Investments Inc (NYSE:CYS) to gather more data points.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
How have hedgies been trading Nextera Energy Partners LP (NYSE:NEP)?
At Q3’s end, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 6% from the previous quarter. Hedge fund ownership has remained in a relatively narrow range over the past year, being held by between 14 and 19 hedge funds throughout that time. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Passport Capital, managed by John Burbank, holds the biggest position in Nextera Energy Partners LP (NYSE:NEP). Passport Capital has a $35.8 million position in the stock. On Passport Capital’s heels is Zimmer Partners, led by Stuart J. Zimmer, holding a $21.6 million position. Remaining hedge funds and institutional investors that are bullish consist of Bernard Lambilliotte’s Ecofin Ltd, Robert Pitts’ Steadfast Capital Management and Paul Marshall and Ian Wace’s Marshall Wace LLP.