Hedge Funds Are Selling PG&E Corporation (PCG)

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about PG&E Corporation (NYSE:PCG)?

PG&E Corporation (NYSE:PCG) was in 48 hedge funds’ portfolios at the end of the first quarter of 2020. PCG has seen a decrease in activity from the world’s largest hedge funds recently. There were 50 hedge funds in our database with PCG positions at the end of the previous quarter. Our calculations also showed that PCG 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.

In the eyes of most investors, hedge funds are assumed to be slow, old financial vehicles of the past. While there are greater than 8000 funds in operation today, Our experts choose to focus on the masters of this club, around 850 funds. These hedge fund managers control the majority of the smart money’s total capital, and by keeping track of their first-class investments, Insider Monkey has determined a number of investment strategies that have historically outstripped the market. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points per annum 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 .

Kevin Michael Ulrich Anchorage Advisors

Kevin Michael Ulrich of Anchorage Advisors

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we are still not out of the woods in terms of the coronavirus pandemic. So, we checked out this successful trader’s “corona catalyst plays“. Also, Europe is set to become the world’s largest cannabis market, so we checked out this European marijuana stock pitch. 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. Keeping this in mind we’re going to check out the new hedge fund action encompassing PG&E Corporation (NYSE:PCG).

How are hedge funds trading PG&E Corporation (NYSE:PCG)?

At the end of the first quarter, a total of 48 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -4% from the previous quarter. The graph below displays the number of hedge funds with bullish position in PCG over the last 18 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Abrams Capital Management held the most valuable stake in PG&E Corporation (NYSE:PCG), which was worth $224.8 million at the end of the third quarter. On the second spot was Anchorage Advisors which amassed $224.8 million worth of shares. Silver Point Capital, Pentwater Capital Management, and Knighthead Capital 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 Knighthead Capital allocated the biggest weight to PG&E Corporation (NYSE:PCG), around 26.06% of its 13F portfolio. Silver Point Capital is also relatively very bullish on the stock, designating 25.29 percent of its 13F equity portfolio to PCG.

Because PG&E Corporation (NYSE:PCG) has faced declining sentiment from the aggregate hedge fund industry, we can see that there is a sect of hedgies that decided to sell off their positions entirely in the third quarter. At the top of the heap, Matthew Knauer and Mina Faltas’s Nokota Management dumped the largest investment of the “upper crust” of funds followed by Insider Monkey, comprising about $83.3 million in stock. D. E. Shaw’s fund, D E Shaw, also cut its stock, about $64.6 million worth. These moves are important to note, as aggregate hedge fund interest fell by 2 funds in the third quarter.

Let’s check out hedge fund activity in other stocks similar to PG&E Corporation (NYSE:PCG). We will take a look at Nuance Communications Inc. (NASDAQ:NUAN), AECOM (NYSE:ACM), Paylocity Holding Corp (NASDAQ:PCTY), and GFL Environmental Inc. (NYSE:GFL). All of these stocks’ market caps resemble PCG’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
NUAN 42 764864 3
ACM 39 670829 3
PCTY 33 409592 7
GFL 10 150736 10
Average 31 499005 5.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 31 hedge funds with bullish positions and the average amount invested in these stocks was $499 million. That figure was $1985 million in PCG’s case. Nuance Communications Inc. (NASDAQ:NUAN) is the most popular stock in this table. On the other hand GFL Environmental Inc. (NYSE:GFL) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks PG&E Corporation (NYSE:PCG) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 7.9% in 2020 through May 22nd but still managed to beat the market by 15.6 percentage points. Hedge funds were also right about betting on PCG as the stock returned 30.1% so far in Q2 (through May 22nd) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

Follow Pg&e Corp (NYSE:PCG)

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