Is First Solar, Inc. (FSLR) A Good Stock To Buy?

We have been waiting for this for a year and finally the third quarter ended up showing a nice bump in the performance of small-cap stocks. Both the S&P 500 and Russell 2000 were up since the end of the second quarter, but small-cap stocks outperformed the large-cap stocks by double digits. This is important for hedge funds, which are big supporters of small-cap stocks, because their investors started pulling some of their capital out due to poor recent performance. It is very likely that equity hedge funds will deliver better risk adjusted returns in the second half of this year. In this article we are going to look at how this recent market trend affected the sentiment of hedge funds towards First Solar, Inc. (NASDAQ:FSLR), and what that likely means for the prospects of the company and its stock.

First Solar, Inc. (NASDAQ:FSLR) investors should pay attention to a decrease in hedge fund interest lately. At the end of this article we will also compare FSLR to other stocks including Keysight Technologies Inc (NYSE:KEYS), Sun Communities Inc (NYSE:SUI), and Senior Housing Properties Trust (NYSE:SNH) to get a better sense of its popularity.

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Now, let’s view the key action regarding First Solar, Inc. (NASDAQ:FSLR).

How have hedgies been trading First Solar, Inc. (NASDAQ:FSLR)?

At Q3’s end, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a drop of 23% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Cliff Asness’s AQR Capital Management has the most valuable position in First Solar, Inc. (NASDAQ:FSLR), worth close to $68.7 million, accounting for 0.1% of its total 13F portfolio. The second largest stake is held by Citadel Investment Group, managed by Ken Griffin, which holds a $45.1 million position; less than 0.1% of its 13F portfolio is allocated to the company. Some other professional money managers that are bullish comprise Jim Roumell’s Roumell Asset Management and Israel Englander’s Millennium Management.

Because First Solar, Inc. (NASDAQ:FSLR) has faced a decline in interest from the aggregate hedge fund industry, logic holds that there exists a select few money managers that decided to sell off their positions entirely by the end of the third quarter. At the top of the heap, Ken Griffin’s Citadel Investment Group said goodbye to the biggest position of the 700 funds monitored by Insider Monkey, totaling an estimated $12.6 million worth of options. Joel Greenblatt’s fund, Gotham Asset Management, also dumped its holding, about $7.6 million worth of FSLR shares. These moves are important to note, as total hedge fund interest dropped by 7 funds by the end of the third quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as First Solar, Inc. (NASDAQ:FSLR) but similarly valued. We will take a look at Keysight Technologies Inc (NYSE:KEYS), Sun Communities Inc (NYSE:SUI), Senior Housing Properties Trust (NYSE:SNH), and United Microelectronics Corp (ADR) (NYSE:UMC). This group of stocks’ market caps are closest to FSLR’s market cap.

As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $124 million. That figure was $246 million in FSLR’s case. Sun Communities Inc (NYSE:SUI) is the most popular stock in this table. On the other hand United Microelectronics Corp (ADR) (NYSE:UMC) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks First Solar, Inc. (NASDAQ:FSLR) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

Disclosure: none.