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Hedge Funds Are Turning Bearish On Enel Americas S.A. (ENIA)

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Enel Americas S.A. (NYSE:ENIA) based on that data.

Enel Americas S.A. (NYSE:ENIA) investors should be aware of a decrease in hedge fund interest of late. Our calculations also showed that ENIA 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.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Zilvinas Zach Mecelis Covalis Capital

Zilvinas Mecelis of Covalis Capital

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. With all of this in mind let’s take a look at the key hedge fund action regarding Enel Americas S.A. (NYSE:ENIA).

How are hedge funds trading Enel Americas S.A. (NYSE:ENIA)?

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 -13% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ENIA over the last 18 quarters. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).

Among these funds, Arrowstreet Capital held the most valuable stake in Enel Americas S.A. (NYSE:ENIA), which was worth $41 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $35.4 million worth of shares. AQR Capital Management, Covalis Capital, and Citadel Investment Group 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 Covalis Capital allocated the biggest weight to Enel Americas S.A. (NYSE:ENIA), around 1.98% of its 13F portfolio. Arrowstreet Capital is also relatively very bullish on the stock, setting aside 0.12 percent of its 13F equity portfolio to ENIA.

Seeing as Enel Americas S.A. (NYSE:ENIA) has witnessed bearish sentiment from the entirety of the hedge funds we track, logic holds that there exists a select few funds who were dropping their positions entirely last quarter. Interestingly, Israel Englander’s Millennium Management said goodbye to the largest investment of all the hedgies tracked by Insider Monkey, comprising an estimated $2.6 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace LLP was right behind this move, as the fund sold off about $1 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 1 funds last quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Enel Americas S.A. (NYSE:ENIA) but similarly valued. These stocks are NetApp Inc. (NASDAQ:NTAP), Ubiquiti Inc. (NYSE:UI), Coupa Software Incorporated (NASDAQ:COUP), and The AES Corporation (NYSE:AES). This group of stocks’ market caps match ENIA’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
NTAP 26 335752 -1
UI 23 162047 -2
COUP 66 2184206 11
AES 31 445516 4
Average 36.5 781880 3

View table here if you experience formatting issues.

As you can see these stocks had an average of 36.5 hedge funds with bullish positions and the average amount invested in these stocks was $782 million. That figure was $102 million in ENIA’s case. Coupa Software Incorporated (NASDAQ:COUP) is the most popular stock in this table. On the other hand Ubiquiti Inc. (NYSE:UI) is the least popular one with only 23 bullish hedge fund positions. Compared to these stocks Enel Americas S.A. (NYSE:ENIA) is even less popular than UI. Hedge funds clearly dropped the ball on ENIA as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. 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 gained 13.9% in 2020 through June 10th and still beat the market by 14.2 percentage points. A small number of hedge funds were also right about betting on ENIA as the stock returned 52.6% so far in the second quarter and outperformed the market by an even larger margin.

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