Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Duke Energy Corporation (NYSE:DUK) based on that data and determine whether they were really smart about the stock.
Is Duke Energy Corporation (NYSE:DUK) an exceptional investment right now? Hedge funds were turning less bullish. The number of long hedge fund bets were trimmed by 4 recently. Duke Energy Corporation (NYSE:DUK) was in 32 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 38. Our calculations also showed that DUK isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now let’s take a peek at the latest hedge fund action regarding Duke Energy Corporation (NYSE:DUK).
Alex Litowitz of Magnetar Capital
Do Hedge Funds Think DUK Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 32 of the hedge funds tracked by Insider Monkey were long this stock, a change of -11% from the previous quarter. By comparison, 36 hedge funds held shares or bullish call options in DUK a year ago. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of Duke Energy Corporation (NYSE:DUK), with a stake worth $167.9 million reported as of the end of September. Trailing Renaissance Technologies was Elliott Investment Management, which amassed a stake valued at $97.6 million. AQR Capital Management, Citadel Investment Group, 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 Claar Advisors allocated the biggest weight to Duke Energy Corporation (NYSE:DUK), around 2.88% of its 13F portfolio. Jones Road Capital Management is also relatively very bullish on the stock, setting aside 1.66 percent of its 13F equity portfolio to DUK.
Due to the fact that Duke Energy Corporation (NYSE:DUK) has faced falling interest from hedge fund managers, logic holds that there were a few funds who were dropping their full holdings by the end of the third quarter. Interestingly, Sander Gerber’s Hudson Bay Capital Management dumped the largest stake of the “upper crust” of funds watched by Insider Monkey, valued at about $11.9 million in stock. Steve Pattyn’s fund, Yaupon Capital, also said goodbye to its stock, about $5.4 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 4 funds by the end of the third quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Duke Energy Corporation (NYSE:DUK) but similarly valued. These stocks are Crown Castle International Corp. (NYSE:CCI), Chubb Limited (NYSE:CB), The Bank of Nova Scotia (NYSE:BNS), The Sherwin-Williams Company (NYSE:SHW), Capital One Financial Corp. (NYSE:COF), Fiserv, Inc. (NASDAQ:FISV), and Equinix Inc (NASDAQ:EQIX). All of these stocks’ market caps are closest to DUK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CCI | 45 | 2089073 | 3 |
| CB | 30 | 1272774 | -12 |
| BNS | 17 | 193321 | 3 |
| SHW | 44 | 1576816 | -5 |
| COF | 55 | 4708790 | -9 |
| FISV | 65 | 3945223 | -7 |
| EQIX | 31 | 1195457 | -2 |
| Average | 41 | 2140208 | -4.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 41 hedge funds with bullish positions and the average amount invested in these stocks was $2140 million. That figure was $688 million in DUK’s case. Fiserv, Inc. (NASDAQ:FISV) is the most popular stock in this table. On the other hand The Bank of Nova Scotia (NYSE:BNS) is the least popular one with only 17 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 41.9. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. A small number of hedge funds were also right about betting on DUK as the stock returned 8.7% since the end of the third quarter (through 1/31) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
