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 NextEra Energy, Inc. (NYSE:NEE)?
Is NextEra Energy, Inc. (NYSE:NEE) a splendid stock to buy now? Prominent investors are taking a bullish view. The number of long hedge fund bets advanced by 6 in recent months. Our calculations also showed that NEE 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 financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 72% since March 2017 and outperformed the S&P 500 ETFs by more than 44 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a 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, we are still not out of the woods in terms of the coronavirus pandemic. So, we checked out this analyst’s “corona catalyst plays“. We interview hedge fund managers and ask them about best ideas. You can watch our latest hedge fund manager interview here and find out the name of the large-cap healthcare stock that Sio Capital’s Michael Castor expects to double. 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 S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to take a glance at the new hedge fund action encompassing NextEra Energy, Inc. (NYSE:NEE).
How are hedge funds trading NextEra Energy, Inc. (NYSE:NEE)?
Heading into the second quarter of 2020, a total of 52 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards NEE over the last 18 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in NextEra Energy, Inc. (NYSE:NEE) was held by Renaissance Technologies, which reported holding $311.6 million worth of stock at the end of September. It was followed by AQR Capital Management with a $178.1 million position. Other investors bullish on the company included Adage Capital Management, Citadel Investment Group, and D E Shaw. In terms of the portfolio weights assigned to each position Ecofin Ltd allocated the biggest weight to NextEra Energy, Inc. (NYSE:NEE), around 14.08% of its 13F portfolio. Yaupon Capital is also relatively very bullish on the stock, earmarking 8.91 percent of its 13F equity portfolio to NEE.
Now, some big names have jumped into NextEra Energy, Inc. (NYSE:NEE) headfirst. Renaissance Technologies, created the biggest position in NextEra Energy, Inc. (NYSE:NEE). Renaissance Technologies had $311.6 million invested in the company at the end of the quarter. Doug Silverman and Alexander Klabin’s Senator Investment Group also made a $66.2 million investment in the stock during the quarter. The following funds were also among the new NEE investors: Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as NextEra Energy, Inc. (NYSE:NEE) but similarly valued. These stocks are Wells Fargo & Company (NYSE:WFC), AstraZeneca plc (NYSE:AZN), HSBC Holdings plc (NYSE:HSBC), and Philip Morris International Inc. (NYSE:PM). All of these stocks’ market caps are similar to NEE’s market cap.
|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 41 hedge funds with bullish positions and the average amount invested in these stocks was $4407 million. That figure was $1436 million in NEE’s case. Wells Fargo & Company (NYSE:WFC) is the most popular stock in this table. On the other hand HSBC Holdings plc (NYSE:HSBC) is the least popular one with only 14 bullish hedge fund positions. NextEra Energy, Inc. (NYSE:NEE) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but 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 7.9% in 2020 through May 22nd but beat the market by 15.6 percentage points. Unfortunately NEE wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on NEE were disappointed as the stock returned -2.8% during the same time period 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 many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.