Did Hedge Funds Get EOG Resources Inc (EOG) Right?

The latest 13F reporting period has come and gone, and 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, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought EOG Resources Inc (NYSE:EOG) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.

EOG Resources Inc (NYSE:EOG) investors should be aware of an increase in support from the world’s most elite money managers of late. EOG Resources Inc (NYSE:EOG) was in 47 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 60. Our calculations also showed that EOG 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 we’re going to take a look at the latest hedge fund action regarding EOG Resources Inc (NYSE:EOG).

Noam Gottesman of GLG Partners

Do Hedge Funds Think EOG Is A Good Stock To Buy Now?

At the end of the third quarter, a total of 47 of the hedge funds tracked by Insider Monkey were long this stock, a change of 34% from the previous quarter. By comparison, 36 hedge funds held shares or bullish call options in EOG a year ago. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, D E Shaw, managed by D. E. Shaw, holds the biggest position in EOG Resources Inc (NYSE:EOG). D E Shaw has a $257.8 million position in the stock, comprising 0.2% of its 13F portfolio. On D E Shaw’s heels is GLG Partners, managed by Noam Gottesman, which holds a $179.3 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions encompass Cliff Asness’s AQR Capital Management, Renaissance Technologies and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Mountain Lake Investment Management allocated the biggest weight to EOG Resources Inc (NYSE:EOG), around 5.55% of its 13F portfolio. Capital Growth Management is also relatively very bullish on the stock, setting aside 2.8 percent of its 13F equity portfolio to EOG.

As aggregate interest increased, key money managers have jumped into EOG Resources Inc (NYSE:EOG) headfirst. Renaissance Technologies, established the most outsized position in EOG Resources Inc (NYSE:EOG). Renaissance Technologies had $60.5 million invested in the company at the end of the quarter. Anand Parekh’s Alyeska Investment Group also made a $49.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Dmitry Balyasny’s Balyasny Asset Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Ken Heebner’s Capital Growth Management.

Let’s also examine hedge fund activity in other stocks similar to EOG Resources Inc (NYSE:EOG). These stocks are Palo Alto Networks Inc (NASDAQ:PANW), IHS Markit Ltd. (NYSE:INFO), Global Payments Inc (NYSE:GPN), IQVIA Holdings, Inc. (NYSE:IQV), Synopsys, Inc. (NASDAQ:SNPS), BCE Inc. (NYSE:BCE), and eBay Inc (NASDAQ:EBAY). This group of stocks’ market valuations resemble EOG’s market valuation.

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As you can see these stocks had an average of 54 hedge funds with bullish positions and the average amount invested in these stocks was $3488 million. That figure was $1025 million in EOG’s case. Palo Alto Networks Inc (NASDAQ:PANW) is the most popular stock in this table. On the other hand BCE Inc. (NYSE:BCE) is the least popular one with only 15 bullish hedge fund positions. EOG Resources Inc (NYSE:EOG) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for EOG is 61.1. 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 EOG as the stock returned 43.8% 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.