Hedge Funds Are Buying EQT Corporation (EQT)

In this article you are going to find out whether hedge funds think EQT Corporation (NYSE:EQT) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

EQT Corporation (NYSE:EQT) shareholders have witnessed an increase in support from the world’s most elite money managers lately. EQT Corporation (NYSE:EQT) was in 43 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 50. Our calculations also showed that EQT isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Clint Carlson of Carlson Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, artificial intelligence is one of the fastest-growing industries right now, so we are checking out stock pitches like this emerging AI stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s view the recent hedge fund action regarding EQT Corporation (NYSE:EQT).

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

At the end of the second quarter, a total of 43 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 23% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards EQT over the last 24 quarters. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

More specifically, D E Shaw was the largest shareholder of EQT Corporation (NYSE:EQT), with a stake worth $62.3 million reported as of the end of June. Trailing D E Shaw was Citadel Investment Group, which amassed a stake valued at $55 million. Encompass Capital Advisors, Quaker Capital Investments, and Aequim Alternative Investments 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 Nierenberg Investment Management allocated the biggest weight to EQT Corporation (NYSE:EQT), around 13.88% of its 13F portfolio. Quaker Capital Investments is also relatively very bullish on the stock, dishing out 13.55 percent of its 13F equity portfolio to EQT.

Now, specific money managers have been driving this bullishness. Holocene Advisors, managed by Brandon Haley, established the most outsized position in EQT Corporation (NYSE:EQT). Holocene Advisors had $18.5 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also made a $5.6 million investment in the stock during the quarter. The other funds with brand new EQT positions are Anand Parekh’s Alyeska Investment Group, Wayne Cooperman’s Cobalt Capital Management, and Clint Carlson’s Carlson Capital.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as EQT Corporation (NYSE:EQT) but similarly valued. These stocks are Colfax Corporation (NYSE:CFX), J2 Global Inc (NASDAQ:JCOM), Sarepta Therapeutics Inc (NASDAQ:SRPT), Louisiana-Pacific Corporation (NYSE:LPX), Vir Biotechnology, Inc. (NASDAQ:VIR), Terminix Global Holdings, Inc. (NYSE:TMX), and The Timken Company (NYSE:TKR). This group of stocks’ market caps resemble EQT’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 25.9 hedge funds with bullish positions and the average amount invested in these stocks was $498 million. That figure was $468 million in EQT’s case. Louisiana-Pacific Corporation (NYSE:LPX) is the most popular stock in this table. On the other hand Vir Biotechnology, Inc. (NASDAQ:VIR) is the least popular one with only 11 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 85.8. 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 22.9% in 2021 through October 1st and still beat the market by 5.6 percentage points. Unfortunately EQT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on EQT were disappointed as the stock returned -7.4% since the end of the second quarter (through 10/1) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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