The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought Evergy, Inc. (NYSE:EVRG) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
Evergy, Inc. (NYSE:EVRG) was in 40 hedge funds’ portfolios at the end of June. The all time high for this statistics is 30. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. EVRG investors should be aware of an increase in hedge fund sentiment lately. There were 30 hedge funds in our database with EVRG holdings at the end of March. Our calculations also showed that EVRG isn’t among the 30 most popular stocks among hedge funds (click for Q2 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 56 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 34% through August 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost precious metals prices. So, we are checking out this junior gold mining stock. Legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind we’re going to take a gander at the latest hedge fund action surrounding Evergy, Inc. (NYSE:EVRG).
Hedge fund activity in Evergy, Inc. (NYSE:EVRG)
At Q2’s end, a total of 40 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 33% from the previous quarter. By comparison, 25 hedge funds held shares or bullish call options in EVRG a year ago. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies has the biggest position in Evergy, Inc. (NYSE:EVRG), worth close to $243.2 million, corresponding to 0.2% of its total 13F portfolio. The second largest stake is held by D. E. Shaw of D E Shaw, with a $146.9 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other peers with similar optimism consist of Israel Englander’s Millennium Management, Benjamin Pass’s TOMS Capital and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position TOMS Capital allocated the biggest weight to Evergy, Inc. (NYSE:EVRG), around 37.67% of its 13F portfolio. Covalis Capital is also relatively very bullish on the stock, dishing out 20.29 percent of its 13F equity portfolio to EVRG.
As one would reasonably expect, some big names have jumped into Evergy, Inc. (NYSE:EVRG) headfirst. TOMS Capital, managed by Benjamin Pass, established the largest position in Evergy, Inc. (NYSE:EVRG). TOMS Capital had $94.9 million invested in the company at the end of the quarter. Dan Loeb’s Third Point also initiated a $88.9 million position during the quarter. The other funds with brand new EVRG positions are Zilvinas Mecelis’s Covalis Capital, Keith Meister’s Corvex Capital, and Joseph Samuels’s Islet Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Evergy, Inc. (NYSE:EVRG) but similarly valued. These stocks are Bio-Rad Laboratories, Inc. (NYSE:BIO), Vipshop Holdings Limited (NYSE:VIPS), Altice USA, Inc. (NYSE:ATUS), M&T Bank Corporation (NYSE:MTB), Sun Communities Inc (NYSE:SUI), Magna International Inc. (NYSE:MGA), and Leidos Holdings Inc (NYSE:LDOS). This group of stocks’ market valuations match EVRG’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 36.1 hedge funds with bullish positions and the average amount invested in these stocks was $904 million. That figure was $1158 million in EVRG’s case. Altice USA, Inc. (NYSE:ATUS) is the most popular stock in this table. On the other hand Magna International Inc. (NYSE:MGA) is the least popular one with only 19 bullish hedge fund positions. Evergy, Inc. (NYSE:EVRG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for EVRG is 67.6. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. 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 33% in 2020 through the end of August and beat the market by 23.2 percentage points. Unfortunately EVRG wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on EVRG were disappointed as the stock returned -9.4% 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.