Is FirstEnergy Corp. (NYSE:FE) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments (for some reason media paid a ton of attention to Ackman’s gigantic JC Penney and Valeant failures) and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
FirstEnergy Corp was in 24 hedge funds’ portfolios at the end of September. FE investors should pay attention to an increase in activity from the world’s largest hedge funds in recent months. There were 21 hedge funds in our database with FE positions at the end of the previous quarter. At the end of this article we will also compare FE to other stocks, including Workday Inc (NYSE:WDAY), Red Hat, Inc. (NYSE:RHT), and Norwegian Cruise Line Holdings Ltd (NASDAQ:NCLH) to get a better sense of its popularity.
In today’s marketplace there are plenty of gauges market participants put to use to analyze their stock investments. Two of the most underrated gauges are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the best picks of the best fund managers can trounce the S&P 500 by a healthy amount (see the details here).
With all of this in mind, we’re going to analyze the recent action surrounding FirstEnergy Corp. (NYSE:FE).
How are hedge funds trading FirstEnergy Corp. (NYSE:FE)?
At the end of the third quarter, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a rise of 14% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Jonathan Barrett and Paul Segal’s Luminus Management has the most valuable position in FirstEnergy Corp. (NYSE:FE), worth close to $228.2 million, comprising 7.1% of its total 13F portfolio. The second largest stake is held by Renaissance Technologies, managed by Jim Simons, which holds a $71.5 million position; 0.2% of its 13F portfolio is allocated to the company. Other members of the smart money that hold long positions contain Israel Englander’s Millennium Management, Glenn Russell Dubin’s Highbridge Capital Management and Cliff Asness’s AQR Capital Management.