Should You Avoid Consolidated Edison, Inc. (ED)?

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Judging by the fact that Consolidated Edison, Inc. (NYSE:ED) has faced bearish sentiment from the aggregate hedge fund industry, we can see that there were a few funds that decided to sell off their full holdings by the end of the third quarter. At the top of the heap, Stuart J. Zimmer’s Zimmer Partners dropped the largest investment of the “upper crust” of funds monitored by Insider Monkey, valued at about $11.6 million in stock. Robert Vollero and Gentry T. Beach’s fund, Vollero Beach Capital Partners, also dropped its stock, about $5.1 million worth. These moves are interesting, as total hedge fund interest dropped by 1 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 Consolidated Edison, Inc. (NYSE:ED) but similarly valued. These stocks are Ameriprise Financial, Inc. (NYSE:AMP), Cummins Inc. (NYSE:CMI), CBS Corporation (NYSE:CBS), and Williams Partners L.P. (NYSE:WPZ). This group of stocks’ market values resemble ED’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AMP 39 1074155 -5
CMI 32 417368 -3
CBS 62 3462368 -9
WPZ 19 170021 0

As you can see these stocks had an average of 38 hedge funds with bullish positions and the average amount invested in these stocks was $1281 million. That figure was $309 million in ED’s case. CBS Corporation (NYSE:CBS) is the most popular stock in this table. On the other hand Williams Partners L.P. (NYSE:WPZ) is the least popular one with only 19 bullish hedge fund positions. Compared to these stocks Consolidated Edison, Inc. (NYSE:ED) is even less popular than WPZ. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

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