After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Comstock Resources Inc (NYSE:CRK).
Is Comstock Resources Inc (NYSE:CRK) a bargain? Hedge funds were in a bullish mood. The number of long hedge fund positions advanced by 4 recently. Comstock Resources Inc (NYSE:CRK) was in 24 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 24. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that CRK isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Matthew Hulsizer of PEAK6 Capital
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 let’s go over the new hedge fund action encompassing Comstock Resources Inc (NYSE:CRK).
Do Hedge Funds Think CRK Is A Good Stock To Buy Now?
At the end of September, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 20% from the previous quarter. By comparison, 24 hedge funds held shares or bullish call options in CRK a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
More specifically, Slate Path Capital was the largest shareholder of Comstock Resources Inc (NYSE:CRK), with a stake worth $37.2 million reported as of the end of September. Trailing Slate Path Capital was Millennium Management, which amassed a stake valued at $32.1 million. D E Shaw, Encompass Capital Advisors, and Maple Rock Capital 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 Maple Rock Capital allocated the biggest weight to Comstock Resources Inc (NYSE:CRK), around 2.25% of its 13F portfolio. Slate Path Capital is also relatively very bullish on the stock, setting aside 1.7 percent of its 13F equity portfolio to CRK.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Maple Rock Capital, managed by Len Kipp and Xavier Majic, established the biggest position in Comstock Resources Inc (NYSE:CRK). Maple Rock Capital had $16 million invested in the company at the end of the quarter. Greg Eisner’s Engineers Gate Manager also made a $1.9 million investment in the stock during the quarter. The other funds with brand new CRK positions are Paul Tudor Jones’s Tudor Investment Corp, Wayne Cooperman’s Cobalt Capital Management, and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s now take a look at hedge fund activity in other stocks similar to Comstock Resources Inc (NYSE:CRK). These stocks are Silicon Motion Technology Corp. (NASDAQ:SIMO), Yatsen Holding Limited (NYSE:YSG), Xometry Inc. (NASDAQ:XMTR), Sinclair Broadcast Group, Inc. (NASDAQ:SBGI), South Jersey Industries Inc (NYSE:SJI), Doma Holdings Inc. (NYSE:DOMA), and PriceSmart, Inc. (NASDAQ:PSMT). This group of stocks’ market values resemble CRK’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SIMO | 22 | 524954 | 2 |
| YSG | 11 | 113504 | -7 |
| XMTR | 18 | 236161 | -10 |
| SBGI | 20 | 437301 | 0 |
| SJI | 17 | 115783 | 3 |
| DOMA | 16 | 246762 | 16 |
| PSMT | 17 | 39637 | 6 |
| Average | 17.3 | 244872 | 1.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.3 hedge funds with bullish positions and the average amount invested in these stocks was $245 million. That figure was $153 million in CRK’s case. Silicon Motion Technology Corp. (NASDAQ:SIMO) is the most popular stock in this table. On the other hand Yatsen Holding Limited (NYSE:YSG) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Comstock Resources Inc (NYSE:CRK) is more popular among hedge funds. Our overall hedge fund sentiment score for CRK is 89. 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. Unfortunately CRK wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CRK were disappointed as the stock returned -19.7% since the end of the third quarter (through 12/9) 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.
