In this article we will check out the progression of hedge fund sentiment towards Vivint Solar Inc (NYSE:VSLR) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Vivint Solar Inc (NYSE:VSLR) investors should be aware of an increase in enthusiasm from smart money recently. VSLR was in 16 hedge funds’ portfolios at the end of March. There were 13 hedge funds in our database with VSLR holdings at the end of the previous quarter. Our calculations also showed that VSLR 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.
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At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, blockchain technology’s influence will go beyond online payments. So, we are checking out this futurist’s moonshot opportunities in tech stocks. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now let’s take a look at the latest hedge fund action surrounding Vivint Solar Inc (NYSE:VSLR).
How are hedge funds trading Vivint Solar Inc (NYSE:VSLR)?
At the end of the first quarter, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 23% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards VSLR over the last 18 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Arosa Capital Management, managed by Till Bechtolsheimer, holds the largest position in Vivint Solar Inc (NYSE:VSLR). Arosa Capital Management has a $14.9 million position in the stock, comprising 1.8% of its 13F portfolio. The second largest stake is held by Point72 Asset Management, led by Steve Cohen, holding a $7.3 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish comprise Ken Griffin’s Citadel Investment Group, and Thomas E. Claugus’s GMT Capital. In terms of the portfolio weights assigned to each position Arosa Capital Management allocated the biggest weight to Vivint Solar Inc (NYSE:VSLR), around 1.8% of its 13F portfolio. Ardsley Partners is also relatively very bullish on the stock, earmarking 0.51 percent of its 13F equity portfolio to VSLR.
With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. GMT Capital, managed by Thomas E. Claugus, created the most valuable position in Vivint Solar Inc (NYSE:VSLR). GMT Capital had $2.1 million invested in the company at the end of the quarter. Philip Hempleman’s Ardsley Partners also initiated a $1.3 million position during the quarter. The other funds with brand new VSLR positions are Philippe Laffont’s Coatue Management, Peter Muller’s PDT Partners, and Karim Abbadi and Edward McBride’s Centiva Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Vivint Solar Inc (NYSE:VSLR) but similarly valued. We will take a look at P.H. Glatfelter Company (NYSE:GLT), Costamare Inc (NYSE:CMRE), Argan, Inc. (NYSE:AGX), and Star Bulk Carriers Corp. (NASDAQ:SBLK). This group of stocks’ market valuations match VSLR’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $96 million. That figure was $35 million in VSLR’s case. Costamare Inc (NYSE:CMRE) is the most popular stock in this table. On the other hand P.H. Glatfelter Company (NYSE:GLT) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Vivint Solar Inc (NYSE:VSLR) 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 13.3% in 2020 through June 25th but still managed to beat the market by 16.8 percentage points. Hedge funds were also right about betting on VSLR as the stock returned 119.9% so far in Q2 (through June 25th) 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.
Disclosure: None. This article was originally published at Insider Monkey.