Should I Buy Duke Energy Corporation (DUK)?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 873 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of June 30th, 2021. What do these smart investors think about Duke Energy Corporation (NYSE:DUK)?

Duke Energy Corporation (NYSE:DUK) was in 36 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 38. DUK has seen an increase in hedge fund interest recently. There were 34 hedge funds in our database with DUK holdings at the end of March. Our calculations also showed that DUK isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

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Cliff Asness of AQR Capital Management

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

At Q2’s end, a total of 36 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from one quarter earlier. By comparison, 33 hedge funds held shares or bullish call options in DUK a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

Is DUK A Good Stock To Buy?

Among these funds, D E Shaw held the most valuable stake in Duke Energy Corporation (NYSE:DUK), which was worth $121.6 million at the end of the second quarter. On the second spot was Elliott Investment Management which amassed $98.7 million worth of shares. AQR Capital Management, Renaissance Technologies, and Adage Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Yaupon Capital allocated the biggest weight to Duke Energy Corporation (NYSE:DUK), around 2.98% of its 13F portfolio. Claar Advisors is also relatively very bullish on the stock, dishing out 2.93 percent of its 13F equity portfolio to DUK.

Consequently, specific money managers have been driving this bullishness. Elliott Investment Management, managed by Paul Singer, created the most outsized position in Duke Energy Corporation (NYSE:DUK). Elliott Investment Management had $98.7 million invested in the company at the end of the quarter. Sander Gerber’s Hudson Bay Capital Management also made a $11.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Steve Pattyn’s Yaupon Capital, David Harding’s Winton Capital Management, and Renee Yao’s Neo Ivy Capital.

Let’s check out hedge fund activity in other stocks similar to Duke Energy Corporation (NYSE:DUK). We will take a look at Canadian National Railway Company (NYSE:CNI), Truist Financial Corporation (NYSE:TFC), Activision Blizzard, Inc. (NASDAQ:ATVI), CSX Corporation (NYSE:CSX), The Sherwin-Williams Company (NYSE:SHW), Coupang, Inc. (NYSE:CPNG), and Equinix Inc (NASDAQ:EQIX). All of these stocks’ market caps resemble DUK’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CNI 40 5310284 4
TFC 39 1019267 3
ATVI 78 3651606 2
CSX 56 4223857 3
SHW 49 2028984 -2
CPNG 33 18042813 -7
EQIX 33 1266516 -8
Average 46.9 5077618 -0.7

View table here if you experience formatting issues.

As you can see these stocks had an average of 46.9 hedge funds with bullish positions and the average amount invested in these stocks was $5078 million. That figure was $566 million in DUK’s case. Activision Blizzard, Inc. (NASDAQ:ATVI) is the most popular stock in this table. On the other hand Coupang, Inc. (NYSE:CPNG) is the least popular one with only 33 bullish hedge fund positions. Duke Energy Corporation (NYSE:DUK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for DUK is 38.8. 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. 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 21.8% in 2021 through October 11th and still beat the market by 4.4 percentage points. A small number of hedge funds were also right about betting on DUK as the stock returned 1.9% since the end of the second quarter (through 10/11) and outperformed the market by an even larger margin.

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