We know that hedge funds generate strong, risk-adjusted returns over the long run, which is why imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, professional 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. However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, let’s examine the smart money sentiment towards EQT Corporation (NYSE:EQT) and determine whether hedge funds skillfully traded this stock.
Is EQT Corporation (NYSE:EQT) a buy right now? Money managers were getting more bullish. The number of long hedge fund bets inched up by 14 in recent months. EQT Corporation (NYSE:EQT) was in 57 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic was previously 50. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that EQT 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 go over the new hedge fund action surrounding EQT Corporation (NYSE:EQT).
David Tepper of Appaloosa Management LP
Do Hedge Funds Think EQT Is A Good Stock To Buy Now?
At third quarter’s end, a total of 57 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 33% from the previous quarter. By comparison, 39 hedge funds held shares or bullish call options in EQT a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
Among these funds, Adage Capital Management held the most valuable stake in EQT Corporation (NYSE:EQT), which was worth $81.7 million at the end of the third quarter. On the second spot was D E Shaw which amassed $72.5 million worth of shares. Citadel Investment Group, Antipodes Partners, and Appaloosa Management LP 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 Quaker Capital Investments allocated the biggest weight to EQT Corporation (NYSE:EQT), around 15.91% of its 13F portfolio. Nierenberg Investment Management is also relatively very bullish on the stock, designating 12.04 percent of its 13F equity portfolio to EQT.
Consequently, key hedge funds have jumped into EQT Corporation (NYSE:EQT) headfirst. Antipodes Partners, managed by Jacob Mitchell, established the biggest position in EQT Corporation (NYSE:EQT). Antipodes Partners had $61.1 million invested in the company at the end of the quarter. Jonathan Barrett and Paul Segal’s Luminus Management also made a $44.5 million investment in the stock during the quarter. The following funds were also among the new EQT investors: Paul Marshall and Ian Wace’s Marshall Wace LLP, David Greenspan’s Slate Path Capital, and Frank Fu’s CaaS Capital.
Let’s check out hedge fund activity in other stocks similar to EQT Corporation (NYSE:EQT). These stocks are Globus Medical Inc (NYSE:GMED), US Foods Holding Corp. (NYSE:USFD), AerCap Holdings N.V. (NYSE:AER), Kilroy Realty Corp (NYSE:KRC), Apartment Income REIT Corp. (NYSE:AIRC), Lincoln Electric Holdings, Inc. (NASDAQ:LECO), and Advanced Drainage Systems Inc. (NYSE:WMS). This group of stocks’ market valuations resemble EQT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GMED | 37 | 266753 | 2 |
| USFD | 29 | 1071095 | -6 |
| AER | 42 | 1448787 | -3 |
| KRC | 24 | 422839 | -2 |
| AIRC | 17 | 270935 | 3 |
| LECO | 21 | 288792 | 1 |
| WMS | 21 | 1092988 | -5 |
| Average | 27.3 | 694598 | -1.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.3 hedge funds with bullish positions and the average amount invested in these stocks was $695 million. That figure was $838 million in EQT’s case. AerCap Holdings N.V. (NYSE:AER) is the most popular stock in this table. On the other hand Apartment Income REIT Corp. (NYSE:AIRC) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks EQT Corporation (NYSE:EQT) is more popular among hedge funds. Our overall hedge fund sentiment score for EQT is 90. 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 managed to beat the market by another 3.6 percentage points. Hedge funds were somewhat right about betting on EQT as the stock returned 3.9% since the end of September (through January 31st) and outperformed the top 5 hedge fund stocks but not the market. This is a rare phenomenon as top hedge fund stocks usually beat the market over the long-term.
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Disclosure: None. This article was originally published at Insider Monkey.
