In this article we will take a look at whether hedge funds think Alliant Energy Corporation (NYSE:LNT) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is Alliant Energy Corporation (NYSE:LNT) an exceptional investment now? Prominent investors are in a bullish mood. The number of long hedge fund bets improved by 2 recently. Our calculations also showed that LNT 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.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 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.
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. Now let’s check out the latest hedge fund action regarding Alliant Energy Corporation (NYSE:LNT).
What does smart money think about Alliant Energy Corporation (NYSE:LNT)?
At the end of the first quarter, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 7% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards LNT over the last 18 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Citadel Investment Group was the largest shareholder of Alliant Energy Corporation (NYSE:LNT), with a stake worth $223.3 million reported as of the end of September. Trailing Citadel Investment Group was Zimmer Partners, which amassed a stake valued at $155.5 million. Renaissance Technologies, Millennium Management, and Carlson 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 Zimmer Partners allocated the biggest weight to Alliant Energy Corporation (NYSE:LNT), around 3.45% of its 13F portfolio. Yaupon Capital is also relatively very bullish on the stock, dishing out 2.97 percent of its 13F equity portfolio to LNT.
As one would reasonably expect, some big names were breaking ground themselves. Soros Fund Management, managed by George Soros, assembled the most outsized position in Alliant Energy Corporation (NYSE:LNT). Soros Fund Management had $7.2 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $5.2 million position during the quarter. The following funds were also among the new LNT investors: Steve Cohen’s Point72 Asset Management, Greg Eisner’s Engineers Gate Manager, and Paul Tudor Jones’s Tudor Investment Corp.
Let’s also examine hedge fund activity in other stocks similar to Alliant Energy Corporation (NYSE:LNT). We will take a look at Martin Marietta Materials, Inc. (NYSE:MLM), Mid America Apartment Communities Inc (NYSE:MAA), Xylem Inc (NYSE:XYL), and Tyler Technologies, Inc. (NYSE:TYL). This group of stocks’ market valuations resemble LNT’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 31.75 hedge funds with bullish positions and the average amount invested in these stocks was $629 million. That figure was $602 million in LNT’s case. Martin Marietta Materials, Inc. (NYSE:MLM) is the most popular stock in this table. On the other hand Mid America Apartment Communities Inc (NYSE:MAA) is the least popular one with only 26 bullish hedge fund positions. Alliant Energy Corporation (NYSE:LNT) is not the least popular stock in this group but hedge fund interest is still below average. 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 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 8.3% in 2020 through the end of May and surpassed the market by 13.2 percentage points. Unfortunately LNT wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); LNT investors were disappointed as the stock returned 3% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.