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Hedge Funds Cashing Out Of Enphase Energy Inc (ENPH)

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. In this article we are going to take a look at smart money sentiment towards Enphase Energy Inc (NASDAQ:ENPH).

Enphase Energy Inc (NASDAQ:ENPH) was in 35 hedge funds’ portfolios at the end of March. ENPH has experienced a decrease in hedge fund sentiment in recent months. There were 39 hedge funds in our database with ENPH positions at the end of the previous quarter. Our calculations also showed that ENPH 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.

Today there are dozens of tools investors can use to analyze stocks. Some of the best tools are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the best picks of the elite hedge fund managers can beat the market by a healthy margin (see the details here).

David E. Shaw of D.E. Shaw

David E. Shaw of D.E. Shaw

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 trades like this one. 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 recent hedge fund action surrounding Enphase Energy Inc (NASDAQ:ENPH).

Hedge fund activity in Enphase Energy Inc (NASDAQ:ENPH)

At the end of the first quarter, a total of 35 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -10% from one quarter earlier. On the other hand, there were a total of 19 hedge funds with a bullish position in ENPH a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is ENPH A Good Stock To Buy?

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, D. E. Shaw’s D E Shaw has the most valuable position in Enphase Energy Inc (NASDAQ:ENPH), worth close to $79.4 million, comprising 0.1% of its total 13F portfolio. Coming in second is Renaissance Technologies, which holds a $75.6 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism contain Peter S. Park’s Park West Asset Management, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. In terms of the portfolio weights assigned to each position Electron Capital Partners allocated the biggest weight to Enphase Energy Inc (NASDAQ:ENPH), around 4.28% of its 13F portfolio. Park West Asset Management is also relatively very bullish on the stock, setting aside 2.65 percent of its 13F equity portfolio to ENPH.

Since Enphase Energy Inc (NASDAQ:ENPH) has experienced bearish sentiment from hedge fund managers, it’s safe to say that there was a specific group of hedge funds that decided to sell off their entire stakes last quarter. Interestingly, Bruce Emery’s Greenvale Capital sold off the largest investment of the “upper crust” of funds followed by Insider Monkey, valued at about $46.4 million in stock. Mark Coe’s fund, Intrinsic Edge Capital, also dropped its stock, about $19.2 million worth. These moves are interesting, as aggregate hedge fund interest fell by 4 funds last quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Enphase Energy Inc (NASDAQ:ENPH) but similarly valued. These stocks are CDK Global Inc (NASDAQ:CDK), ITT Corp (NYSE:ITT), Lancaster Colony Corporation (NASDAQ:LANC), and HollyFrontier Corporation (NYSE:HFC). This group of stocks’ market caps resemble ENPH’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CDK 24 180742 -1
ITT 28 373059 0
LANC 23 180392 7
HFC 24 203908 -6
Average 24.75 234525 0

View table here if you experience formatting issues.

As you can see these stocks had an average of 24.75 hedge funds with bullish positions and the average amount invested in these stocks was $235 million. That figure was $370 million in ENPH’s case. ITT Corp (NYSE:ITT) is the most popular stock in this table. On the other hand Lancaster Colony Corporation (NASDAQ:LANC) is the least popular one with only 23 bullish hedge fund positions. Compared to these stocks Enphase Energy Inc (NASDAQ:ENPH) 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 8.3% in 2020 through the end of May but still managed to beat the market by 13.2 percentage points. Hedge funds were also right about betting on ENPH as the stock returned 80.2% so far in Q2 (through the end of May) 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.

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