Is Evergy, Inc. (EVRG) Going to Burn These Hedge Funds?

With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter of 2021. One of these stocks was Evergy, Inc. (NYSE:EVRG).

Evergy, Inc. (NYSE:EVRG) has experienced a decrease in hedge fund sentiment lately. Evergy, Inc. (NYSE:EVRG) was in 30 hedge funds’ portfolios at the end of March. The all time high for this statistic is 40. Our calculations also showed that EVRG isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

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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, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Now let’s go over the latest hedge fund action surrounding Evergy, Inc. (NYSE:EVRG).

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

At the end of March, a total of 30 of the hedge funds tracked by Insider Monkey were long this stock, a change of -9% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards EVRG over the last 23 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Paul Singer’s Elliott Investment Management has the largest position in Evergy, Inc. (NYSE:EVRG), worth close to $627.6 million, corresponding to 4.7% of its total 13F portfolio. Sitting at the No. 2 spot is Covalis Capital, led by Zilvinas Mecelis, holding a $85.7 million position; the fund has 17.7% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions comprise Israel Englander’s Millennium Management, D. E. Shaw’s D E Shaw and Phill Gross and Robert Atchinson’s Adage Capital Management. In terms of the portfolio weights assigned to each position Covalis Capital allocated the biggest weight to Evergy, Inc. (NYSE:EVRG), around 17.66% of its 13F portfolio. Coann Capital is also relatively very bullish on the stock, dishing out 8.76 percent of its 13F equity portfolio to EVRG.

Judging by the fact that Evergy, Inc. (NYSE:EVRG) has experienced a decline in interest from the aggregate hedge fund industry, it’s easy to see that there is a sect of hedge funds that decided to sell off their entire stakes heading into Q2. Interestingly, Keith Meister’s Corvex Capital said goodbye to the biggest stake of the “upper crust” of funds watched by Insider Monkey, worth close to $12.2 million in stock. Bernard Lambilliotte’s fund, Ecofin Ltd, also said goodbye to its stock, about $5.1 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 3 funds heading into Q2.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Evergy, Inc. (NYSE:EVRG) but similarly valued. We will take a look at Mohawk Industries, Inc. (NYSE:MHK), Tenaris S.A. (NYSE:TS), Novavax, Inc. (NASDAQ:NVAX), W.R. Berkley Corporation (NYSE:WRB), Telefonica Brasil SA (NYSE:VIV), Diamondback Energy Inc (NASDAQ:FANG), and GameStop Corp. (NYSE:GME). This group of stocks’ market values resemble EVRG’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MHK 36 1297287 -3
TS 10 327456 -2
NVAX 38 1271331 1
WRB 32 644589 -5
VIV 9 90185 1
FANG 35 343531 1
GME 13 96439 -14
Average 24.7 581545 -3

View table here if you experience formatting issues.

As you can see these stocks had an average of 24.7 hedge funds with bullish positions and the average amount invested in these stocks was $582 million. That figure was $1198 million in EVRG’s case. Novavax, Inc. (NASDAQ:NVAX) is the most popular stock in this table. On the other hand Telefonica Brasil SA (NYSE:VIV) is the least popular one with only 9 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 60.7. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 22.8% in 2021 through July 2nd and beat the market again by 6 percentage points. Unfortunately EVRG wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on EVRG were disappointed as the stock returned 4.3% since the end of March (through 7/2) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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