Anadarko Petroleum Corporation (NYSE:APC) has experienced an increase in hedge fund interest lately, however our calculations also showed that APC isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Boykin Curry of Eagle Capital
Let’s view the latest hedge fund action regarding Anadarko Petroleum Corporation (NYSE:APC).
What does the smart money think about Anadarko Petroleum Corporation (NYSE:APC)?
Heading into the first quarter of 2019, a total of 54 of the hedge funds tracked by Insider Monkey were long this stock, a change of 20% from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards APC over the last 14 quarters. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
Among these funds, Adage Capital Management held the most valuable stake in Anadarko Petroleum Corporation (NYSE:APC), which was worth $349.4 million at the end of the third quarter. On the second spot was Millennium Management which amassed $232.2 million worth of shares. Moreover, Citadel Investment Group, AQR Capital Management, and Eagle Capital Management were also bullish on Anadarko Petroleum Corporation (NYSE:APC), allocating a large percentage of their portfolios to this stock.
With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. Encompass Capital Advisors, managed by Todd J. Kantor, initiated the largest call position in Anadarko Petroleum Corporation (NYSE:APC). Encompass Capital Advisors had $52.6 million invested in the company at the end of the quarter. Matt Smith’s Deep Basin Capital also made a $35.6 million investment in the stock during the quarter. The following funds were also among the new APC investors: Jim Simons’s Renaissance Technologies, and Alex Snow’s Lansdowne Partners.
Let’s also examine hedge fund activity in other stocks similar to Anadarko Petroleum Corporation (NYSE:APC). We will take a look at Digital Realty Trust, Inc. (NYSE:DLR), The Kroger Co. (NYSE:KR), Twitter Inc (NYSE:TWTR), and WEC Energy Group, Inc. (NYSE:WEC). This group of stocks’ market valuations are closest to APC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DLR | 23 | 268314 | -11 |
| KR | 33 | 573567 | 3 |
| TWTR | 49 | 1540956 | 7 |
| WEC | 13 | 381115 | -6 |
| Average | 29.5 | 690988 | -1.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.5 hedge funds with bullish positions and the average amount invested in these stocks was $691 million. That figure was $1761 million in APC’s case. Twitter Inc (NYSE:TWTR) is the most popular stock in this table. On the other hand WEC Energy Group, Inc. (NYSE:WEC) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Anadarko Petroleum Corporation (NYSE:APC) is more popular among hedge funds. Our calculations showed that top 15 most popular stocks among hedge funds returned 19.7% through March 15th and outperformed the S&P 500 ETF (SPY) by 6.6 percentage points. Unfortunately APC wasn’t in this group. Hedge funds that bet on APC were disappointed as the stock returned 2.3% and underperformed the market. If you are interested in investing in large cap stocks, you should check out the top 15 hedge fund stocks as 13 of these outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.
