Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: EQT Corporation (NYSE:EQT).
Is EQT Corporation (NYSE:EQT) undervalued? The smart money is buying. The number of bullish hedge fund bets went up by 2 lately. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Mobileye NV (NYSE:MBLY), Ally Financial Inc (NYSE:ALLY), and CMS Energy Corporation (NYSE:CMS) to gather more data points.
Follow Eqt Corp (NYSE:EQT)
Follow Eqt Corp (NYSE:EQT)
At the moment, there is a multitude of formulas stock market investors can use to evaluate publicly traded companies. A couple of the most innovative formulas are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the S&P 500 by a solid amount (see the details here).
With all of this in mind, let’s take a peek at the fresh action encompassing EQT Corporation (NYSE:EQT).
Hedge fund activity in EQT Corporation (NYSE:EQT)
At the end of Q3, a total of 39 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 5% from the second quarter. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Millennium Management, managed by Israel Englander, holds the number one position in EQT Corporation (NYSE:EQT). Millennium Management has a $231.4 million position in the stock, comprising 0.4% of its 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, managed by Ken Griffin, which holds a $222.9 million position; 0.2% of its 13F portfolio is allocated to the stock. Other peers that are bullish consist of Jeffrey Tannenbaum’s Fir Tree, Robert Polak’s Anchor Bolt Capital, and Phill Gross and Robert Atchinson’s Adage Capital Management.
As industrywide interest jumped, key money managers were leading the bulls’ herd. Waratah Capital Advisors, managed by Brad Dunkley and Blair Levinsky, established the largest position in EQT Corporation (NYSE:EQT). Waratah Capital Advisors had $13.6 million invested in the company at the end of the quarter. Peter Muller’s PDT Partners also made a $13 million investment in the stock during the quarter. The other funds with brand new EQT positions are Robert Vollero and Gentry T. Beach’s Vollero Beach Capital Partners, Phil Frohlich’s Prescott Group Capital Management, and Millennium Management.
Let’s now review hedge fund activity in other stocks similar to EQT Corporation (NYSE:EQT). These stocks are Mobileye NV (NYSE:MBLY), Ally Financial Inc (NYSE:ALLY), CMS Energy Corporation (NYSE:CMS), and Coty Inc (NYSE:COTY). All of these stocks’ market caps resemble EQT Corporation (NYSE:EQT)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MBLY | 32 | 704976 | -7 |
| ALLY | 57 | 3532229 | 1 |
| CMS | 18 | 60102 | -2 |
| COTY | 23 | 437847 | 3 |
As you can see, these stocks had an average of 33 hedge funds with bullish positions and the average amount invested in these stocks was $1.18 billion. That figure was $922 million in EQT Corporation (NYSE:EQT)’s case. Ally Financial Inc (NYSE:ALLY) is the most popular stock in this table. On the other hand, CMS Energy Corporation (NYSE:CMS) is the least popular one with only 18 bullish hedge fund positions. EQT Corporation (NYSE:EQT) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Ally Financial Inc (NYSE:ALLY) might be a better candidate to consider a long position.
