Will the new coronavirus cause a recession in US in the next 6 months? On February 27th, we put the probability at 75% and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards YPF Sociedad Anonima (NYSE:YPF).
YPF Sociedad Anonima (NYSE:YPF) shareholders have witnessed a decrease in hedge fund interest lately. YPF was in 15 hedge funds’ portfolios at the end of December. There were 20 hedge funds in our database with YPF positions at the end of the previous quarter. Our calculations also showed that YPF isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 72.9% since March 2017 and outperformed the S&P 500 ETFs by more than 41 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Howard Marks of Oaktree Capital Management
We leave no stone unturned when looking for the next great investment idea. For example we recently identified a stock that trades 25% below the net cash on its balance sheet. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences, and go through short-term trade recommendations like this one. We even check out the recommendations of services with hard to believe track records. 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. With all of this in mind let’s take a peek at the recent hedge fund action regarding YPF Sociedad Anonima (NYSE:YPF).
Hedge fund activity in YPF Sociedad Anonima (NYSE:YPF)
At Q4’s end, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -25% from the previous quarter. The graph below displays the number of hedge funds with bullish position in YPF over the last 18 quarters. So, let’s see 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, Joshua Friedman and Mitchell Julis’s Canyon Capital Advisors has the largest position in YPF Sociedad Anonima (NYSE:YPF), worth close to $33 million, amounting to 0.8% of its total 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, founded by Jim Simons, holding a $17.6 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other members of the smart money with similar optimism include Howard Marks’s Oaktree Capital Management, Jonathan Kolatch’s Redwood Capital Management and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Redwood Capital Management allocated the biggest weight to YPF Sociedad Anonima (NYSE:YPF), around 1.4% of its 13F portfolio. Canyon Capital Advisors is also relatively very bullish on the stock, setting aside 0.77 percent of its 13F equity portfolio to YPF.
Due to the fact that YPF Sociedad Anonima (NYSE:YPF) has witnessed falling interest from the smart money, it’s safe to say that there exists a select few fund managers that decided to sell off their positions entirely heading into Q4. Intriguingly, Jonathan Barrett and Paul Segal’s Luminus Management sold off the largest investment of the “upper crust” of funds followed by Insider Monkey, worth about $24 million in stock, and Bruce J. Richards and Louis Hanover’s Marathon Asset Management was right behind this move, as the fund dumped about $3.1 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 5 funds heading into Q4.
Let’s check out hedge fund activity in other stocks similar to YPF Sociedad Anonima (NYSE:YPF). These stocks are The Boston Beer Company Inc (NYSE:SAM), The Brink’s Company (NYSE:BCO), PS Business Parks Inc (NYSE:PSB), and Helen of Troy Limited (NASDAQ:HELE). This group of stocks’ market caps are closest to YPF’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SAM | 26 | 577456 | -4 |
| BCO | 24 | 453999 | 3 |
| PSB | 15 | 54684 | -4 |
| HELE | 17 | 208287 | 2 |
| Average | 20.5 | 323607 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.5 hedge funds with bullish positions and the average amount invested in these stocks was $324 million. That figure was $93 million in YPF’s case. The Boston Beer Company Inc (NYSE:SAM) is the most popular stock in this table. On the other hand PS Business Parks Inc (NYSE:PSB) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks YPF Sociedad Anonima (NYSE:YPF) is even less popular than PSB. Hedge funds dodged a bullet by taking a bearish stance towards YPF. Our calculations showed that the top 20 most popular hedge fund stocks returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 17.4% in 2020 through March 25th but managed to beat the market by 5.5 percentage points. Unfortunately YPF wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); YPF investors were disappointed as the stock returned -63.5% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in Q1.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
