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. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded FirstEnergy Corp. (NYSE:FE) and determine whether the smart money was really smart about this stock.
Is FirstEnergy Corp. (NYSE:FE) an exceptional stock to buy now? The smart money was in an optimistic mood. The number of bullish hedge fund positions inched up by 2 lately. FirstEnergy Corp. (NYSE:FE) was in 38 hedge funds’ portfolios at the end of September. The all time high for this statistic is 59. Our calculations also showed that FE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 36 hedge funds in our database with FE holdings at the end of June.
Noam Gottesman of GLG Partners
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. With all of this in mind let’s take a gander at the key hedge fund action surrounding FirstEnergy Corp. (NYSE:FE).
Do Hedge Funds Think FE Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 38 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in FE over the last 25 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in FirstEnergy Corp. (NYSE:FE) was held by Icahn Capital LP, which reported holding $675.6 million worth of stock at the end of September. It was followed by First Pacific Advisors LLC with a $152 million position. Other investors bullish on the company included D E Shaw, Empyrean Capital Partners, and 683 Capital Partners. In terms of the portfolio weights assigned to each position Jones Road Capital Management allocated the biggest weight to FirstEnergy Corp. (NYSE:FE), around 4.91% of its 13F portfolio. Lion Point is also relatively very bullish on the stock, earmarking 4.17 percent of its 13F equity portfolio to FE.
As aggregate interest increased, specific money managers have jumped into FirstEnergy Corp. (NYSE:FE) headfirst. Point72 Asset Management, managed by Steve Cohen, established the most valuable position in FirstEnergy Corp. (NYSE:FE). Point72 Asset Management had $33.4 million invested in the company at the end of the quarter. Jinghua Yan’s TwinBeech Capital also made a $3.3 million investment in the stock during the quarter. The following funds were also among the new FE investors: Greg Eisner’s Engineers Gate Manager, Noam Gottesman’s GLG Partners, and Michael Gelband’s ExodusPoint Capital.
Let’s also examine hedge fund activity in other stocks similar to FirstEnergy Corp. (NYSE:FE). We will take a look at Broadridge Financial Solutions, Inc. (NYSE:BR), SK Telecom Co., Ltd. (NYSE:SKM), Halliburton Company (NYSE:HAL), M&T Bank Corporation (NYSE:MTB), Asana Inc. (NYSE:ASAN), PG&E Corporation (NYSE:PCG), and Bio-Techne Corporation (NASDAQ:TECH). This group of stocks’ market values are similar to FE’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BR | 17 | 229119 | -10 |
| SKM | 6 | 108281 | -2 |
| HAL | 29 | 1247608 | 0 |
| MTB | 27 | 774232 | -19 |
| ASAN | 33 | 1053115 | 11 |
| PCG | 54 | 3825487 | -10 |
| TECH | 33 | 432450 | 8 |
| Average | 28.4 | 1095756 | -3.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.4 hedge funds with bullish positions and the average amount invested in these stocks was $1096 million. That figure was $1480 million in FE’s case. PG&E Corporation (NYSE:PCG) is the most popular stock in this table. On the other hand SK Telecom Co., Ltd. (NYSE:SKM) is the least popular one with only 6 bullish hedge fund positions. FirstEnergy Corp. (NYSE:FE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FE is 59.7. 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. Hedge funds were also right about betting on FE as the stock returned 19% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
