Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.
Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE) has experienced an increase in hedge fund sentiment of late, though overall sentiment is low, with four shareholders of the company within our database. At the end of this article, we will also compare Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE) to other stocks including Key Energy Services, Inc. (NYSE:KEG), North American Energy Partners Inc.(USA) (NYSE:NOA), and Health Insurance Innovations Inc (NASDAQ:HIIQ) to get a better sense of its popularity.
In the 21st century investor’s toolkit there are dozens of formulas market participants use to evaluate publicly traded companies. Two of the most under-the-radar formulas are hedge fund and insider trading indicators. Hedge fund experts at Insider Monkey have shown that, historically, those who follow the top picks of the best investment managers can outclass the S&P 500 by a significant margin (see the details here).
With all of this in mind, we’re going to analyze the key action encompassing Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE).
What does the smart money think about Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE)?
Heading into Q4, a total of four of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 33% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, GMT Capital, managed by Thomas E. Claugus, holds the number one position in Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE). GMT Capital has a $1.7 million position in the stock, comprising less than 0.1% of its 13F portfolio. The second-largest stake is held by D E Shaw, with a $0.2 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include Israel Englander’s Millennium Management, and Ken Griffin’s Citadel Investment Group.
Let’s also examine hedge fund activity in other stocks similar to Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE). These stocks are Key Energy Services, Inc. (NYSE:KEG), North American Energy Partners Inc.(USA) (NYSE:NOA), Health Insurance Innovations Inc (NASDAQ:HIIQ), and Spark Networks Inc (NYSEAMEX:LOV). This group of stocks’ market values resemble Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE)’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of nine hedge funds with bullish positions and the average amount invested in these stocks was $17 million, while just $2 million was invested in Yingli Green Energy. Key Energy Services, Inc. (NYSE:KEG) is the most popular stock in this table. On the other hand, Health Insurance Innovations Inc (NASDAQ:HIIQ) is the least popular one with only four bullish hedge fund positions. Compared to these stocks Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE) is even less popular than Health Insurance Innovations Inc (NASDAQ:HIIQ) when factoring in the money invested in it. Considering that hedge funds aren’t fond of this stock, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.