Published on 19 Oct 2021 on Insider Monkey via Yahoo Finance
Eversource Energy (ES): Hedge Funds Are Snapping Up
We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn't mean that they don't have occasional colossal losses; they do (like Melvin Capital's recent GameStop losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Eversource Energy (NYSE:ES).
Is Eversource Energy (NYSE:ES) a first-rate investment now? The best stock pickers were turning bullish. The number of bullish hedge fund bets increased by 2 in recent months. Eversource Energy (NYSE:ES) was in 26 hedge funds' portfolios at the end of the second quarter of 2021. The all time high for this statistic is 28. Our calculations also showed that ES isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 24 hedge funds in our database with ES holdings at the end of March.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.