The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Comstock Resources Inc (NYSE:CRK).
Is Comstock Resources Inc (NYSE:CRK) the right investment to pursue these days? The best stock pickers are taking a pessimistic view. The number of bullish hedge fund positions were cut by 4 lately. Our calculations also showed that CRK 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). CRK was in 3 hedge funds’ portfolios at the end of March. There were 7 hedge funds in our database with CRK positions at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most shareholders, hedge funds are assumed to be underperforming, old financial vehicles of yesteryear. While there are over 8000 funds trading today, Our researchers hone in on the masters of this club, about 850 funds. These money managers shepherd the lion’s share of the smart money’s total capital, and by paying attention to their top picks, Insider Monkey has uncovered a few investment strategies that have historically outperformed the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points annually 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 .
Ken Griffin of Citadel Investment Group
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. We interview hedge fund managers and ask them about their best ideas. You can watch our latest hedge fund manager interview here and find out the name of the large-cap healthcare stock that Sio Capital’s Michael Castor expects to double. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to take a look at the recent hedge fund action surrounding Comstock Resources Inc (NYSE:CRK).
Hedge fund activity in Comstock Resources Inc (NYSE:CRK)
At the end of the first quarter, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -57% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards CRK over the last 18 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Till Bechtolsheimer’s Arosa Capital Management has the number one position in Comstock Resources Inc (NYSE:CRK), worth close to $1.9 million, comprising 0.2% of its total 13F portfolio. The second largest stake is held by Millennium Management, managed by Israel Englander, which holds a $0.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism contain Ken Griffin’s Citadel Investment Group, Minhua Zhang’s Weld Capital Management and . In terms of the portfolio weights assigned to each position Arosa Capital Management allocated the biggest weight to Comstock Resources Inc (NYSE:CRK), around 0.22% of its 13F portfolio. Weld Capital Management is also relatively very bullish on the stock, dishing out 0.09 percent of its 13F equity portfolio to CRK.
Because Comstock Resources Inc (NYSE:CRK) has faced a decline in interest from the smart money, it’s easy to see that there were a few hedge funds that slashed their entire stakes by the end of the third quarter. It’s worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital cut the largest stake of the 750 funds monitored by Insider Monkey, worth an estimated $1.1 million in stock, and Jonathan Soros’s JS Capital was right behind this move, as the fund dumped about $0.5 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 4 funds by the end of the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Comstock Resources Inc (NYSE:CRK). We will take a look at TriMas Corp (NASDAQ:TRS), Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL), Kornit Digital Ltd. (NASDAQ:KRNT), and Eldorado Gold Corp (NYSE:EGO). All of these stocks’ market caps are similar to CRK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TRS | 13 | 71796 | -2 |
| MDGL | 15 | 270102 | -4 |
| KRNT | 9 | 28349 | -3 |
| EGO | 14 | 137122 | 1 |
| Average | 12.75 | 126842 | -2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.75 hedge funds with bullish positions and the average amount invested in these stocks was $127 million. That figure was $3 million in CRK’s case. Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL) is the most popular stock in this table. On the other hand Kornit Digital Ltd. (NASDAQ:KRNT) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Comstock Resources Inc (NYSE:CRK) is even less popular than KRNT. Hedge funds dodged a bullet by taking a bearish stance towards CRK. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 7.9% in 2020 through May 22nd but managed to beat the market by 15.6 percentage points. Unfortunately CRK wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); CRK investors were disappointed as the stock returned -7.4% during the second quarter (through May 22nd) 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 so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.
