Here is What Hedge Funds Think About Antero Resources Corp (AR)

The Insider Monkey team has completed processing the quarterly 13F filings for the June quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Antero Resources Corp (NYSE:AR).

Hedge fund interest in Antero Resources Corp (NYSE:AR) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that AR isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). At the end of this article we will also compare AR to other stocks including UP Fintech Holding Limited (NASDAQ:TIGR), Highwoods Properties Inc (NYSE:HIW), and SailPoint Technologies Holdings, Inc. (NYSE:SAIL) to get a better sense of its popularity.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Andrew Raab of FPR Partners

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to take a look at the recent hedge fund action surrounding Antero Resources Corp (NYSE:AR).

Do Hedge Funds Think AR Is A Good Stock To Buy Now?

Heading into the third quarter of 2021, a total of 33 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. By comparison, 21 hedge funds held shares or bullish call options in AR a year ago. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping 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 $139.6 million reported as of the end of June. Trailing SailingStone Capital Partners was Graham Capital Management, which amassed a stake valued at $113.3 million. FPR Partners, Shah Capital Management, and Slate Path Capital 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 27.32% of its 13F portfolio. Shah Capital Management is also relatively very bullish on the stock, designating 23.36 percent of its 13F equity portfolio to AR.

Because Antero Resources Corp (NYSE:AR) has witnessed bearish sentiment from the aggregate hedge fund industry, we can see that there were a few hedgies who sold off their positions entirely last quarter. It’s worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital said goodbye to the biggest investment of the “upper crust” of funds monitored by Insider Monkey, totaling an estimated $15.8 million in stock, and Glenn Greenberg’s Brave Warrior Capital was right behind this move, as the fund cut about $15.3 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Antero Resources Corp (NYSE:AR) but similarly valued. We will take a look at UP Fintech Holding Limited (NASDAQ:TIGR), Highwoods Properties Inc (NYSE:HIW), SailPoint Technologies Holdings, Inc. (NYSE:SAIL), OneConnect Financial Technology Co., Ltd. (NYSE:OCFT), Wingstop Inc (NASDAQ:WING), AllianceBernstein Holding LP (NYSE:AB), and FTI Consulting, Inc. (NYSE:FCN). This group of stocks’ market valuations are closest to AR’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.4 hedge funds with bullish positions and the average amount invested in these stocks was $291 million. That figure was $841 million in AR’s case. FTI Consulting, Inc. (NYSE:FCN) is the most popular stock in this table. On the other hand AllianceBernstein Holding LP (NYSE:AB) is the least popular one with only 9 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 74.4. 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 returned 24.9% in 2021 through October 15th but still managed to beat the market by 4.5 percentage points. Hedge funds were also right about betting on AR as the stock returned 30.3% since the end of June (through 10/15) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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Disclosure: None. This article was originally published at Insider Monkey.