Hedge Funds Aren’t Crazy About HollyFrontier Corp (HFC) Anymore

In today’s marketplace, there are many methods investors can use to monitor Mr. Market. Two of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top investment managers can outperform the broader indices by a significant amount (see just how much).

Just as key, optimistic insider trading sentiment is a second way to analyze the stock market universe. Just as you’d expect, there are a variety of incentives for an executive to cut shares of his or her company, but just one, very obvious reason why they would behave bullishly. Many academic studies have demonstrated the useful potential of this method if shareholders know what to do (learn more here).

Now that that’s out of the way, we’re going to analyze the newest info about HollyFrontier Corp (NYSE:HFC).

Hedge fund activity in HollyFrontier Corp (NYSE:HFC)

Heading into Q3, a total of 32 of the hedge funds we track were bullish in this stock, a change of -6% from one quarter earlier. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their stakes considerably.

Out of the hedge funds we follow, Point State Capital, managed by Sean Cullinan, holds the largest position in HollyFrontier Corp (NYSE:HFC). Point State Capital has a $148.3 million position in the stock, comprising 2.6% of its 13F portfolio. The second largest stake is held by Blue Ridge Capital, managed by John Griffin, which held a $111.9 million position; the fund has 1.4% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include D. E. Shaw’s D E Shaw, Jim Simons’s Renaissance Technologies and Alan Fournier’s Pennant Capital Management.

Due to the fact HollyFrontier Corp (NYSE:HFC) has faced a fall in interest from the top-tier hedge fund industry, it’s safe to say that there is a sect of funds that slashed their entire stakes heading into Q2. At the top of the heap, Jeffrey Vinik’s Vinik Asset Management cut the biggest stake of all the hedgies we monitor, totaling an estimated $39.6 million in stock. Israel Englander’s fund, Millennium Management, also dumped its stock, about $33 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 2 funds heading into Q2.

How have insiders been trading HollyFrontier Corp (NYSE:HFC)?

Insider buying is at its handiest when the company in focus has experienced transactions within the past half-year. Over the latest half-year time period, HollyFrontier Corp (NYSE:HFC) has seen 2 unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to HollyFrontier Corp (NYSE:HFC). These stocks are Marathon Oil Corporation (NYSE:MRO), Access Midstream Partners LP (NYSE:ACMP), Ultrapar Participacoes SA (ADR) (NYSE:UGP), Tesoro Corporation (NYSE:TSO), and Murphy Oil Corporation (NYSE:MUR). This group of stocks belong to the oil & gas refining & marketing industry and their market caps resemble HFC’s market cap.