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. We at Insider Monkey have plowed through 817 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 September 30th, about a month before the elections. In this article we look at what those investors think of Clean Energy Fuels Corp (NASDAQ:CLNE).
Is CLNE a good stock to buy now? Hedge fund interest in Clean Energy Fuels Corp (NASDAQ:CLNE) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that CLNE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). At the end of this article we will also compare CLNE to other stocks including CEL-SCI Corporation (NYSE:CVM), ADTRAN, Inc. (NASDAQ:ADTN), and Hawkins, Inc. (NASDAQ:HWKN) to get a better sense of its popularity.
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 has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 66 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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 real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Keeping this in mind we’re going to analyze the new hedge fund action regarding Clean Energy Fuels Corp (NASDAQ:CLNE).
Do Hedge Funds Think CLNE Is A Good Stock To Buy Now?
At the end of September, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. By comparison, 10 hedge funds held shares or bullish call options in CLNE a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, holds the most valuable position in Clean Energy Fuels Corp (NASDAQ:CLNE). Renaissance Technologies has a $12.9 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Renaissance Technologies’s heels is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $0.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism contain Ken Griffin’s Citadel Investment Group, John Overdeck and David Siegel’s Two Sigma Advisors and Paul Tudor Jones’s Tudor Investment Corp. In terms of the portfolio weights assigned to each position Zebra Capital Management allocated the biggest weight to Clean Energy Fuels Corp (NASDAQ:CLNE), around 0.04% of its 13F portfolio. Tudor Investment Corp is also relatively very bullish on the stock, earmarking 0.02 percent of its 13F equity portfolio to CLNE.
Due to the fact that Clean Energy Fuels Corp (NASDAQ:CLNE) has experienced a decline in interest from the smart money, it’s safe to say that there lies a certain “tier” of fund managers that slashed their positions entirely heading into Q4. It’s worth mentioning that Phill Gross and Robert Atchinson’s Adage Capital Management dropped the largest investment of the 750 funds followed by Insider Monkey, comprising close to $0.7 million in stock, and Matthew Hulsizer’s PEAK6 Capital Management was right behind this move, as the fund sold off about $0 million worth. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Clean Energy Fuels Corp (NASDAQ:CLNE) but similarly valued. These stocks are CEL-SCI Corporation (NYSE:CVM), ADTRAN, Inc. (NASDAQ:ADTN), Hawkins, Inc. (NASDAQ:HWKN), Invesco Mortgage Capital Inc (NYSE:IVR), Mirum Pharmaceuticals, Inc. (NASDAQ:MIRM), GAN Limited (NASDAQ:GAN), and DMC Global Inc. (NASDAQ:BOOM). This group of stocks’ market caps resemble CLNE’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 8.6 hedge funds with bullish positions and the average amount invested in these stocks was $46 million. That figure was $17 million in CLNE’s case. ADTRAN, Inc. (NASDAQ:ADTN) is the most popular stock in this table. On the other hand CEL-SCI Corporation (NYSE:CVM) is the least popular one with only 5 bullish hedge fund positions. Clean Energy Fuels Corp (NASDAQ:CLNE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CLNE is 66.1. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. Hedge funds were also right about betting on CLNE as the stock returned 91.5% since the end of Q3 (through 12/8) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.