Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards Antero Resources Corp (NYSE:AR) changed recently.
Antero Resources Corp (NYSE:AR) shareholders have witnessed an increase in support from the world’s most elite money managers recently. Antero Resources Corp (NYSE:AR) was in 41 hedge funds’ portfolios at the end of September. The all time high for this statistic is 51. There were 33 hedge funds in our database with AR positions at the end of the second quarter. Our calculations also showed that AR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
John Overdeck of Two Sigma Advisors
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 take a gander at the new hedge fund action encompassing Antero Resources Corp (NYSE:AR).
Do Hedge Funds Think AR Is A Good Stock To Buy Now?
At third quarter’s end, a total of 41 of the hedge funds tracked by Insider Monkey were long this stock, a change of 24% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards AR over the last 25 quarters. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
More specifically, SailingStone Capital Partners was the largest shareholder of Antero Resources Corp (NYSE:AR), with a stake worth $115 million reported as of the end of September. Trailing SailingStone Capital Partners was Graham Capital Management, which amassed a stake valued at $104.8 million. FPR Partners, Shah Capital Management, and Two Sigma Advisors 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 SailingStone Capital Partners allocated the biggest weight to Antero Resources Corp (NYSE:AR), around 29.08% of its 13F portfolio. Shah Capital Management is also relatively very bullish on the stock, earmarking 27.99 percent of its 13F equity portfolio to AR.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Encompass Capital Advisors, managed by Todd J. Kantor, initiated the most outsized position in Antero Resources Corp (NYSE:AR). Encompass Capital Advisors had $67.5 million invested in the company at the end of the quarter. Kenneth Mario Garschina’s Mason Capital Management also initiated a $25.9 million position during the quarter. The other funds with new positions in the stock are Phill Gross and Robert Atchinson’s Adage Capital Management, Ken Grossman and Glen Schneider’s SG Capital Management, and Mike Masters’s Masters Capital Management.
Let’s now review hedge fund activity in other stocks similar to Antero Resources Corp (NYSE:AR). We will take a look at Exponent, Inc. (NASDAQ:EXPO), DCP Midstream LP (NYSE:DCP), Quidel Corporation (NASDAQ:QDEL), Manpowergroup Inc (NYSE:MAN), Autohome Inc (NYSE:ATHM), Sonoco Products Company (NYSE:SON), and Vicor Corp (NASDAQ:VICR). This group of stocks’ market caps resemble AR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EXPO | 21 | 126075 | 1 |
| DCP | 4 | 18162 | 1 |
| QDEL | 22 | 252628 | 3 |
| MAN | 26 | 316244 | -1 |
| ATHM | 11 | 173382 | -5 |
| SON | 16 | 131631 | 1 |
| VICR | 13 | 266143 | 0 |
| Average | 16.1 | 183466 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.1 hedge funds with bullish positions and the average amount invested in these stocks was $183 million. That figure was $973 million in AR’s case. Manpowergroup Inc (NYSE:MAN) is the most popular stock in this table. On the other hand DCP Midstream LP (NYSE:DCP) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Antero Resources Corp (NYSE:AR) is more popular among hedge funds. Our overall hedge fund sentiment score for AR is 84.1. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately AR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on AR were disappointed as the stock returned -6.6% since the end of the third quarter (through 11/30) 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.
Follow Antero Resources Corp (NYSE:AR)
Follow Antero Resources Corp (NYSE:AR)
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Disclosure: None. This article was originally published at Insider Monkey.
