Is JinkoSolar Holding Co., Ltd. (NYSE:JKS) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is JKS a good stock to buy now? JinkoSolar Holding Co., Ltd. (NYSE:JKS) was in 10 hedge funds’ portfolios at the end of September. The all time high for this statistics is 12. JKS has seen an increase in hedge fund interest recently. There were 8 hedge funds in our database with JKS holdings at the end of June. Our calculations also showed that JKS 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.
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 5 best cheap stocks to buy according to Ray Dalio to identify stocks with upside potential. 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. With all of this in mind we’re going to take a glance at the recent hedge fund action surrounding JinkoSolar Holding Co., Ltd. (NYSE:JKS).
Do Hedge Funds Think JKS Is A Good Stock To Buy Now?
At third quarter’s end, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 25% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards JKS over the last 21 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in JinkoSolar Holding Co., Ltd. (NYSE:JKS) was held by D E Shaw, which reported holding $20.7 million worth of stock at the end of September. It was followed by PEAK6 Capital Management with a $10.8 million position. Other investors bullish on the company included Citadel Investment Group, Millennium Management, and Point72 Asset Management. In terms of the portfolio weights assigned to each position PEAK6 Capital Management allocated the biggest weight to JinkoSolar Holding Co., Ltd. (NYSE:JKS), around 0.03% of its 13F portfolio. Point72 Asset Management is also relatively very bullish on the stock, earmarking 0.02 percent of its 13F equity portfolio to JKS.
As one would reasonably expect, specific money managers have been driving this bullishness. Point72 Asset Management, managed by Steve Cohen, established the most outsized position in JinkoSolar Holding Co., Ltd. (NYSE:JKS). Point72 Asset Management had $4.5 million invested in the company at the end of the quarter. Benjamin A. Smith’s Laurion Capital Management also initiated a $1.4 million position during the quarter. The following funds were also among the new JKS investors: Michael Gelband’s ExodusPoint Capital, Karim Abbadi and Edward McBride’s Centiva Capital, and David Harding’s Winton Capital Management.
Let’s now review hedge fund activity in other stocks similar to JinkoSolar Holding Co., Ltd. (NYSE:JKS). These stocks are John Wiley & Sons Inc (NYSE:JW), Brandywine Realty Trust (NYSE:BDN), InterDigital, Inc. (NASDAQ:IDCC), Cronos Group Inc. (NASDAQ:CRON), Big Lots, Inc. (NYSE:BIG), Editas Medicine, Inc. (NASDAQ:EDIT), and Minerals Technologies Inc (NYSE:MTX). All of these stocks’ market caps are similar to JKS’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 17 hedge funds with bullish positions and the average amount invested in these stocks was $110 million. That figure was $43 million in JKS’s case. InterDigital, Inc. (NASDAQ:IDCC) is the most popular stock in this table. On the other hand Cronos Group Inc. (NASDAQ:CRON) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks JinkoSolar Holding Co., Ltd. (NYSE:JKS) is even less popular than CRON. Our overall hedge fund sentiment score for JKS is 32. 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 JKS 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 JKS as the stock returned 57% 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.