Hedge Funds Never Been Less Bullish On Just Energy Group, Inc. (JE)

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Just Energy Group, Inc. (NYSE:JE) based on that data.

Is Just Energy Group, Inc. (NYSE:JE) a bargain? Investors who are in the know are getting less bullish. The number of long hedge fund positions went down by 3 lately. Our calculations also showed that JE 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). JE was in 4 hedge funds’ portfolios at the end of the first quarter of 2020. There were 7 hedge funds in our database with JE positions at the end of the previous quarter.

Video: Watch our video about the top 5 most popular hedge fund stocks.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 51 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.

Philip Hempleman Ardsley Partners

Philip Hempleman of Ardsley Partners

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 stocks recommended/scorned by legendary Bill Miller. 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 take a glance at the latest hedge fund action regarding Just Energy Group, Inc. (NYSE:JE).

What have hedge funds been doing with Just Energy Group, Inc. (NYSE:JE)?

Heading into the second quarter of 2020, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of -43% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards JE over the last 18 quarters. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Ardsley Partners, managed by Philip Hempleman, holds the number one position in Just Energy Group, Inc. (NYSE:JE). Ardsley Partners has a $3.6 million position in the stock, comprising 1.4% of its 13F portfolio. The second most bullish fund manager is Renaissance Technologies, holding a $1.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that are bullish comprise John Overdeck and David Siegel’s Two Sigma Advisors, Ken Griffin’s Citadel Investment Group and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Ardsley Partners allocated the biggest weight to Just Energy Group, Inc. (NYSE:JE), around 1.42% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, dishing out 0.0012 percent of its 13F equity portfolio to JE.

Due to the fact that Just Energy Group, Inc. (NYSE:JE) has witnessed bearish sentiment from the smart money, it’s easy to see that there were a few fund managers who sold off their entire stakes in the third quarter. It’s worth mentioning that D. E. Shaw’s D E Shaw dumped the biggest position of the 750 funds followed by Insider Monkey, worth an estimated $0.5 million in stock, and Israel Englander’s Millennium Management was right behind this move, as the fund sold off about $0.4 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 3 funds in the third quarter.

Let’s check out hedge fund activity in other stocks similar to Just Energy Group, Inc. (NYSE:JE). These stocks are Axcella Health Inc. (NASDAQ:AXLA), Genprex, Inc. (NASDAQ:GNPX), Happiness Biotech Group Limited (NASDAQ:HAPP), and THL Credit, Inc. (NASDAQ:TCRD). This group of stocks’ market values are closest to JE’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AXLA 2 318 -1
GNPX 2 164 0
HAPP 2 171 2
TCRD 5 10161 -2
Average 2.75 2704 -0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 2.75 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $5 million in JE’s case. THL Credit, Inc. (NASDAQ:TCRD) is the most popular stock in this table. On the other hand Axcella Health Inc. (NASDAQ:AXLA) is the least popular one with only 2 bullish hedge fund positions. Just Energy Group, Inc. (NYSE:JE) 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 8.3% in 2020 through the end of May but beat the market by 13.2 percentage points. Unfortunately JE wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on JE were disappointed as the stock returned -25.8% 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.

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