The government requires hedge funds and wealthy investors with over a certain portfolio size to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings discloses the funds’ positions on September 30. We at Insider Monkey have made an extensive database of more than 700 of those elite funds and prominent investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Contango Oil & Gas Company (NYSEMKT:MCF) based on those filings.
Contango Oil & Gas Company (NYSEMKT:MCF) investors should be aware of a decrease in hedge fund sentiment of late. MCF was in 11 hedge funds’ portfolios at the end of the third quarter of 2015. There were 14 hedge funds in our database with MCF holdings at the end of the previous quarter. At the end of this article we will also compare MCF to other stocks including Enzo Biochem, Inc. (NYSE:ENZ), Information Services Group, Inc. (NASDAQ:III), and Rosetta Stone Inc (NYSE:RST) to get a better sense of its popularity.
Follow Contango Oil & Gas Co (NYSEMKT:MCF)
Follow Contango Oil & Gas Co (NYSEMKT:MCF)
If you’d ask most stock holders, hedge funds are seen as unimportant, outdated financial vehicles of the past. While there are more than 8000 funds with their doors open at the moment, We hone in on the upper echelon of this group, approximately 700 funds. These money managers manage bulk of the smart money’s total asset base, and by shadowing their matchless stock picks, Insider Monkey has determined many investment strategies that have historically exceeded the broader indices. Insider Monkey’s small-cap hedge fund strategy outstripped the S&P 500 index by 12 percentage points per year for a decade in their back tests.
Keeping this in mind, we’re going to view the fresh action regarding Contango Oil & Gas Company (NYSEMKT:MCF).
What does the smart money think about Contango Oil & Gas Company (NYSEMKT:MCF)?
At Q3’s end, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of -21% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Howard Marks’s Oaktree Capital Management has the largest position in Contango Oil & Gas Company (NYSEMKT:MCF), worth close to $9.8 million, corresponding to 0.1% of its total 13F portfolio. On Oaktree Capital Management’s heels is GRT Capital Partners, managed by Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk, which holds an $2.5 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism comprise Jim Simons’ Renaissance Technologies, and Glenn Russell Dubin’s Highbridge Capital Management.
Because Contango Oil & Gas Company (NYSEMKT:MCF) has experienced a declination in interest from the aggregate hedge fund industry, logic holds that there is a sect of hedge funds that slashed their entire stakes in the third quarter. It’s worth mentioning that Paul Tudor Jones’s Tudor Investment Corp cut the biggest investment of the 700 funds tracked by Insider Monkey, valued at close to $0.5 million in stock, and Peter Muller’s PDT Partners was right behind this move, as the fund dropped about $0.5 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 3 funds in the third quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Contango Oil & Gas Company (NYSEMKT:MCF) but similarly valued. These stocks are Enzo Biochem, Inc. (NYSE:ENZ), Information Services Group, Inc. (NASDAQ:III), Rosetta Stone Inc (NYSE:RST), and Owens Realty Mortgage Inc (NYSEMKT:ORM). This group of stocks’ market values are closest to MCF’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ENZ | 10 | 7486 | -1 |
| III | 5 | 8022 | -5 |
| RST | 12 | 81507 | 1 |
| ORM | 4 | 15055 | 0 |
As you can see these stocks had an average of 7.75 hedge funds with bullish positions and the average amount invested in these stocks was $28 million. That figure was $57 million in MCF’s case. Rosetta Stone Inc (NYSE:RST) is the most popular stock in this table. On the other hand Owens Realty Mortgage Inc (NYSEMKT:ORM) is the least popular one with only 4 bullish hedge fund positions. Contango Oil & Gas Company (NYSEMKT:MCF) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard RST might be a better candidate to consider a long position.
