We at Insider Monkey have gone over 867 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of September 30th. In this article, we look at what those funds think of NextEra Energy, Inc. (NYSE:NEE) based on that data.
NextEra Energy, Inc. (NYSE:NEE) has experienced a decrease in support from the world's most elite money managers recently. NextEra Energy, Inc. (NYSE:NEE) was in 53 hedge funds' portfolios at the end of September. The all time high for this statistic is 64. There were 59 hedge funds in our database with NEE positions at the end of the second quarter. Our calculations also showed that NEE 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. With all of this in mind let's take a peek at the fresh hedge fund action regarding NextEra Energy, Inc. (NYSE:NEE).
Ken Fisher of Fisher Asset Management
Do Hedge Funds Think NEE Is A Good Stock To Buy Now?
At the end of September, a total of 53 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -10% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards NEE over the last 25 quarters. With the smart money's positions undergoing their usual ebb and flow, there exists an "upper tier" of notable hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
More specifically, Fisher Asset Management was the largest shareholder of NextEra Energy, Inc. (NYSE:NEE), with a stake worth $1145.9 million reported as of the end of September. Trailing Fisher Asset Management was D E Shaw, which amassed a stake valued at $264.4 million. Adage Capital Management, Citadel Investment Group, and AQR 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 Quaero Capital allocated the biggest weight to NextEra Energy, Inc. (NYSE:NEE), around 4.55% of its 13F portfolio. Coann Capital is also relatively very bullish on the stock, dishing out 4.3 percent of its 13F equity portfolio to NEE.
Seeing as NextEra Energy, Inc. (NYSE:NEE) has faced falling interest from the entirety of the hedge funds we track, we can see that there lies a certain "tier" of hedge funds who were dropping their entire stakes heading into Q4. Intriguingly, Doug Silverman and Alexander Klabin's Senator Investment Group dumped the biggest stake of the "upper crust" of funds monitored by Insider Monkey, totaling an estimated $47.6 million in stock, and Paul Marshall and Ian Wace's Marshall Wace LLP was right behind this move, as the fund sold off about $24.7 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 6 funds heading into Q4.
Let's check out hedge fund activity in other stocks similar to NextEra Energy, Inc. (NYSE:NEE). These stocks are Linde plc (NYSE:LIN), Charter Communications, Inc. (NASDAQ:CHTR), Philip Morris International Inc. (NYSE:PM), Intuit Inc. (NASDAQ:INTU), Honeywell International Inc. (NASDAQ:HON), QUALCOMM, Incorporated (NASDAQ:QCOM), and Citigroup Inc. (NYSE:C). This group of stocks' market valuations are similar to NEE's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LIN,46,4769164,-9 CHTR,74,18794064,-1 PM,48,5924682,2 INTU,64,6152464,-2 HON,45,927738,-12 QCOM,70,3519652,-2 C,79,5587345,-8 Average,60.9,6525016,-4.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 60.9 hedge funds with bullish positions and the average amount invested in these stocks was $6525 million. That figure was $2374 million in NEE's case. Citigroup Inc. (NYSE:C) is the most popular stock in this table. On the other hand Honeywell International Inc. (NASDAQ:HON) is the least popular one with only 45 bullish hedge fund positions. NextEra Energy, Inc. (NYSE:NEE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for NEE is 35.6. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. A small number of hedge funds were also right about betting on NEE as the stock returned 11% since the end of the third quarter (through 11/30) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.