Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Public Service Enterprise Group Incorporated (NYSE:PEG).
Public Service Enterprise Group Incorporated (NYSE:PEG) has seen an increase in support from the world’s most elite money managers recently. Our calculations also showed that PEG 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In the eyes of most shareholders, hedge funds are viewed as unimportant, outdated financial vehicles of yesteryear. While there are more than 8000 funds in operation today, Our researchers hone in on the moguls of this club, about 850 funds. Most estimates calculate that this group of people have their hands on the lion’s share of the hedge fund industry’s total capital, and by watching their finest stock picks, Insider Monkey has deciphered numerous investment strategies that have historically surpassed the broader indices. Insider Monkey’s flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
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. Keeping this in mind we’re going to check out the recent hedge fund action encompassing Public Service Enterprise Group Incorporated (NYSE:PEG).
Hedge fund activity in Public Service Enterprise Group Incorporated (NYSE:PEG)
At the end of the first quarter, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from the previous quarter. On the other hand, there were a total of 28 hedge funds with a bullish position in PEG a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Public Service Enterprise Group Incorporated (NYSE:PEG) was held by AQR Capital Management, which reported holding $171.2 million worth of stock at the end of September. It was followed by Zimmer Partners with a $123.5 million position. Other investors bullish on the company included D E Shaw, Two Sigma Advisors, and Renaissance Technologies. In terms of the portfolio weights assigned to each position Ecofin Ltd allocated the biggest weight to Public Service Enterprise Group Incorporated (NYSE:PEG), around 4.81% of its 13F portfolio. Yaupon Capital is also relatively very bullish on the stock, designating 2.94 percent of its 13F equity portfolio to PEG.
Consequently, key hedge funds were breaking ground themselves. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the biggest position in Public Service Enterprise Group Incorporated (NYSE:PEG). Arrowstreet Capital had $36.5 million invested in the company at the end of the quarter. Clint Carlson’s Carlson Capital also initiated a $26.6 million position during the quarter. The following funds were also among the new PEG investors: Brandon Haley’s Holocene Advisors, Greg Eisner’s Engineers Gate Manager, and Sara Nainzadeh’s Centenus Global Management.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Public Service Enterprise Group Incorporated (NYSE:PEG) but similarly valued. These stocks are Motorola Solutions Inc (NYSE:MSI), Paychex, Inc. (NASDAQ:PAYX), O’Reilly Automotive Inc (NASDAQ:ORLY), and KLA Corporation (NASDAQ:KLAC). This group of stocks’ market values are similar to PEG’s market value.
|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 40.25 hedge funds with bullish positions and the average amount invested in these stocks was $955 million. That figure was $902 million in PEG’s case. O’Reilly Automotive Inc (NASDAQ:ORLY) is the most popular stock in this table. On the other hand KLA Corporation (NASDAQ:KLAC) is the least popular one with only 26 bullish hedge fund positions. Public Service Enterprise Group Incorporated (NYSE:PEG) 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 PEG wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); PEG investors were disappointed as the stock returned 13.6% 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.