Do Hedge Funds Love Exterran Corporation (EXTN)?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Exterran Corporation (NYSE:EXTN) based on that data.

Exterran Corporation (NYSE:EXTN) has experienced a decrease in activity from the world’s largest hedge funds recently. Our calculations also showed that EXTN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

According to most market participants, hedge funds are viewed as slow, outdated financial vehicles of the past. While there are over 8000 funds in operation today, Our experts hone in on the upper echelon of this group, about 850 funds. These money managers preside over the majority of all hedge funds’ total asset base, and by observing their inimitable picks, Insider Monkey has deciphered various investment strategies that have historically outstripped the broader indices. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

J. Carlo Cannell of Cannell Capital

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, we take a look at lists like the 10 best imported beer in 2020 to identify emerging trends that are likely to lead to 1000% gains in the coming years. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to take a glance at the recent hedge fund action regarding Exterran Corporation (NYSE:EXTN).

How are hedge funds trading Exterran Corporation (NYSE:EXTN)?

At Q1’s end, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -30% from the fourth quarter of 2019. On the other hand, there were a total of 18 hedge funds with a bullish position in EXTN a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Exterran Corporation (NYSE:EXTN) was held by Cannell Capital, which reported holding $5.7 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $3.3 million position. Other investors bullish on the company included D E Shaw, Arrowstreet Capital, and Springbok Capital. In terms of the portfolio weights assigned to each position Cannell Capital allocated the biggest weight to Exterran Corporation (NYSE:EXTN), around 2.37% of its 13F portfolio. Fondren Management is also relatively very bullish on the stock, earmarking 0.55 percent of its 13F equity portfolio to EXTN.

Since Exterran Corporation (NYSE:EXTN) has experienced declining sentiment from the smart money, we can see that there exists a select few money managers who were dropping their entire stakes by the end of the first quarter. It’s worth mentioning that Paul Marshall and Ian Wace’s Marshall Wace LLP sold off the biggest position of the “upper crust” of funds watched by Insider Monkey, valued at an estimated $0.6 million in stock. Jim Roumell’s fund, Roumell Asset Management, also sold off its stock, about $0.5 million worth. These moves are interesting, as total hedge fund interest dropped by 6 funds by the end of the first quarter.

Let’s now review hedge fund activity in other stocks similar to Exterran Corporation (NYSE:EXTN). We will take a look at LCNB Corp. (NASDAQ:LCNB), Sol-Gel Technologies Ltd. (NASDAQ:SLGL), First Internet Bancorp (NASDAQ:INBK), and FS Bancorp, Inc. (NASDAQ:FSBW). This group of stocks’ market values are closest to EXTN’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $6 million. That figure was $14 million in EXTN’s case. First Internet Bancorp (NASDAQ:INBK) is the most popular stock in this table. On the other hand LCNB Corp. (NASDAQ:LCNB) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Exterran Corporation (NYSE:EXTN) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.3% in 2020 through June 25th and still beat the market by 16.8 percentage points. Unfortunately EXTN wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on EXTN were disappointed as the stock returned 12.5% during the second quarter (through June 25th) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

Disclosure: None. This article was originally published at Insider Monkey.