Is ENIA A Good Stock To Buy Now?

Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks aren’t doing great but many of the stocks that delivered strong returns since March are still going very strong and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment to Enel Americas S.A. (NYSE:ENIA) changed recently.

Is ENIA a good stock to buy now? Enel Americas S.A. (NYSE:ENIA) has seen a decrease in hedge fund sentiment in recent months. Enel Americas S.A. (NYSE:ENIA) was in 11 hedge funds’ portfolios at the end of September. The all time high for this statistics is 15. There were 12 hedge funds in our database with ENIA positions at the end of the second quarter. Our calculations also showed that ENIA 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).

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

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Zilvinas Zach Mecelis Covalis Capital

Zilvinas Mecelis of Covalis Capital

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 let’s take a glance at the fresh hedge fund action regarding Enel Americas S.A. (NYSE:ENIA).

Do Hedge Funds Think ENIA Is A Good Stock To Buy Now?

At Q3’s end, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -8% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards ENIA over the last 21 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).

The largest stake in Enel Americas S.A. (NYSE:ENIA) was held by Renaissance Technologies, which reported holding $24.5 million worth of stock at the end of September. It was followed by Arrowstreet Capital with a $13.6 million position. Other investors bullish on the company included Covalis Capital, AQR Capital Management, and D E Shaw. In terms of the portfolio weights assigned to each position Covalis Capital allocated the biggest weight to Enel Americas S.A. (NYSE:ENIA), around 4.83% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.02 percent of its 13F equity portfolio to ENIA.

Because Enel Americas S.A. (NYSE:ENIA) has witnessed declining sentiment from the aggregate hedge fund industry, logic holds that there were a few funds that decided to sell off their full holdings in the third quarter. Intriguingly, Benjamin A. Smith’s Laurion Capital Management sold off the biggest investment of the “upper crust” of funds tracked by Insider Monkey, worth an estimated $0.7 million in stock. Matthew Tewksbury’s fund, Stevens Capital Management, also sold off its stock, about $0.5 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 1 funds in the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Enel Americas S.A. (NYSE:ENIA). These stocks are Credicorp Ltd. (NYSE:BAP), CBOE Global Markets Inc (NASDAQ:CBOE), Zynga Inc (NASDAQ:ZNGA), Sunrun Inc (NASDAQ:RUN), Pegasystems Inc. (NASDAQ:PEGA), NetApp Inc. (NASDAQ:NTAP), and Lamb Weston Holdings, Inc. (NYSE:LW). This group of stocks’ market caps match ENIA’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BAP 19 139193 -1
CBOE 33 872502 1
ZNGA 48 959687 -4
RUN 29 3270810 8
PEGA 32 1866556 4
NTAP 31 429263 6
LW 27 204303 2
Average 31.3 1106045 2.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 31.3 hedge funds with bullish positions and the average amount invested in these stocks was $1106 million. That figure was $58 million in ENIA’s case. Zynga Inc (NASDAQ:ZNGA) is the most popular stock in this table. On the other hand Credicorp Ltd. (NYSE:BAP) is the least popular one with only 19 bullish hedge fund positions. Compared to these stocks Enel Americas S.A. (NYSE:ENIA) is even less popular than BAP. Our overall hedge fund sentiment score for ENIA is 26. 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. Hedge funds clearly dropped the ball on ENIA as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. 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. A small number of hedge funds were also right about betting on ENIA as the stock returned 19.7% since Q3 (through December 8th) and outperformed the market by an even larger margin.

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