Hedge Funds Are Selling DTE Energy Company (DTE)

In this article you are going to find out whether hedge funds think DTE Energy Company (NYSE:DTE) 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.

DTE Energy Company (NYSE:DTE) shareholders have witnessed a decrease in enthusiasm from smart money in recent months. DTE Energy Company (NYSE:DTE) was in 26 hedge funds’ portfolios at the end of March. The all time high for this statistic is 35. There were 29 hedge funds in our database with DTE holdings at the end of December. Our calculations also showed that DTE isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

To the average investor there are a lot of signals stock market investors have at their disposal to size up stocks. A couple of the most under-the-radar signals are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the best picks of the elite hedge fund managers can trounce the broader indices by a superb amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Michael Platt Bluecrest Capital Management

Michael Platt of BlueCrest Capital Mgmt.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now let’s take a look at the fresh hedge fund action regarding DTE Energy Company (NYSE:DTE).

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

At the end of the first quarter, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -10% from the previous quarter. The graph below displays the number of hedge funds with bullish position in DTE over the last 23 quarters. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

More specifically, AQR Capital Management was the largest shareholder of DTE Energy Company (NYSE:DTE), with a stake worth $48.4 million reported as of the end of March. Trailing AQR Capital Management was Holocene Advisors, which amassed a stake valued at $33.3 million. D E Shaw, Two Sigma Advisors, and Weiss Asset Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Socorro Asset Management allocated the biggest weight to DTE Energy Company (NYSE:DTE), around 3.69% of its 13F portfolio. Courage Capital is also relatively very bullish on the stock, dishing out 0.83 percent of its 13F equity portfolio to DTE.

Because DTE Energy Company (NYSE:DTE) has faced a decline in interest from the smart money, we can see that there were a few money managers that decided to sell off their entire stakes heading into Q2. Interestingly, Renaissance Technologies said goodbye to the largest position of all the hedgies watched by Insider Monkey, totaling about $17.3 million in stock, and Michael Gelband’s ExodusPoint Capital was right behind this move, as the fund dropped about $9.5 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 3 funds heading into Q2.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as DTE Energy Company (NYSE:DTE) but similarly valued. These stocks are Carnival Corporation & plc (NYSE:CCL), AvalonBay Communities Inc (NYSE:AVB), Copart, Inc. (NASDAQ:CPRT), Consolidated Edison, Inc. (NYSE:ED), Datadog, Inc. (NASDAQ:DDOG), Credit Suisse Group AG (NYSE:CS), and TELUS Corporation (NYSE:TU). All of these stocks’ market caps are closest to DTE’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CCL 44 593600 -3
AVB 40 630728 8
CPRT 49 966765 3
ED 22 196630 -10
DDOG 44 2383744 -8
CS 13 35775 2
TU 18 200045 4
Average 32.9 715327 -0.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 32.9 hedge funds with bullish positions and the average amount invested in these stocks was $715 million. That figure was $206 million in DTE’s case. Copart, Inc. (NASDAQ:CPRT) is the most popular stock in this table. On the other hand Credit Suisse Group AG (NYSE:CS) is the least popular one with only 13 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 42.3. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 24% in 2021 through July 9th and surpassed the market again by 6.7 percentage points. Unfortunately DTE wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); DTE investors were disappointed as the stock returned 2.9% since the end of March (through 7/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

Follow Dte Energy Co (NYSE:DTE)

Suggested Articles:

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