Image source: SunEdison.

When billionaire hedge fund managers take interest in a stock, it can be an interesting time for retail investors to compare their investment thesis with those who have the money move a stock in a big way. And while we don't believe in blindly following billionaire's purchases, it's always interesting to see what they're looking to buy or sell.

In the cases of TerraForm Power (TERP) and TerraForm Global (NASDAQ: GLBL), there are some big-name hedge fund managers putting millions to work in these stocks, but be warned: One of them has a pretty poor track record in renewable energy.

Battling for TerraForm Power and TerraForm Global

You can't look at either TerraForm Power or TerraForm Global without looking at their sponsor, now bankrupt SunEdison (SUNEQ). The solar power system developer created the two yieldcos as companies who would buy its projects as they were developed, and pay dividends and incentive distribution rights (incentive payments based on an increased dividend) in the process. David Einhorn of Greenlight Capital was one of the most bullish investors on SunEdison, and he lost hundreds of millions of dollars on that bet.

As SunEdison was collapsing, there was a convoluted set of transactions and executive fighting that eventually led to David Tepper's Appaloosa Management taking a big stake in TerraForm Power and suing SunEdison to try and get the company to relinquish control of the yieldco. (For some of the backstory on that, see the this article.)

Ironically, Tepper appeared to be winning his battle to gain independence for TerraForm Power from SunEdison at the same time Einhorn was losing his bet on SunEdison. And this is where the change in position for both funds in the first quarter becomes so fascinating. Below is the position change and total shares owned at the end of Q1 by Greenlight Capital and Appaloosa Management.

Fund

Stock

Shares Added in Q1 2016

Total Shares Owned March 31, 2016

Percentage Change in Q1

Appaloosa Management

TERP

1.11 million

8.71 million

14.6%

Greenlight Capital

TERP

0

2.85 million

0%

Appaloosa Management

GLBL

3.65 million

3.65 million

n/a

Greenlight Capital

GLBL

0

1.9 million

0%

Source: 13-F filings.

What's interesting to note here is that Appaloosa Management has both added to its position in TerraForm Power and opened a large position in TerraForm Global. And after Einhorn lost hundreds of millions, if not a billion dollars, on SunEdison, he's now putting money to work in the yieldcos. 

Image source: SunEdison.

What to take away from billionaires' bets on the TerraForms

What's most intriguing to me here is that Einhorn's seat on the board of directors of SunEdison gave him an inside look at TerraForm Power and TerraForm Global. If he sees both being able to adjust their debt covenants and overcome any cross-default problems from SunEdison's bankruptcy, that's worth keeping in mind.

On the other side, Tepper hasn't given up his fight for the two yieldcos to gain further independence from SunEdison. And he appears to be winning, especially since SunEdison's bankruptcy could result in the company being liquidated.

Time to bet on TerraForm Power and TerraForm Global?

While I won't be buying TerraForm Power or TerraForm Global based on David Tepper and David Einhorn's recent purchases, I do think they're interesting data points that investors should keep in mind. Tepper is continuing his legal fight for independence at the yieldcos, which would be good for both, and Einhorn has an insider's view of the companies thanks to his fund's seat on SunEdison's board.

If we start seeing positive developments that show the yieldcos won't have cross-defaults because of SunEdison's bankruptcy, they could become big winners for investors. And maybe these hedge funds are getting out in front of that news.