The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 867 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30th holdings, data that is available nowhere else. Should you consider HollyFrontier Corporation (NYSE:HFC) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
HollyFrontier Corporation (NYSE:HFC) investors should be aware of a decrease in enthusiasm from smart money lately. HollyFrontier Corporation (NYSE:HFC) was in 24 hedge funds’ portfolios at the end of September. The all time high for this statistic is 40. Our calculations also showed that HFC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Joel Greenblatt of Gotham Asset Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Now let’s take a glance at the latest hedge fund action surrounding HollyFrontier Corporation (NYSE:HFC).
Do Hedge Funds Think HFC Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -20% from the second quarter of 2021. By comparison, 28 hedge funds held shares or bullish call options in HFC a year ago. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital has the most valuable position in HollyFrontier Corporation (NYSE:HFC), worth close to $77.7 million, corresponding to 0.1% of its total 13F portfolio. On Arrowstreet Capital’s heels is D E Shaw, led by D. E. Shaw, holding a $75.5 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other professional money managers that are bullish encompass John Overdeck and David Siegel’s Two Sigma Advisors, Steve Cohen’s Point72 Asset Management and Renaissance Technologies. In terms of the portfolio weights assigned to each position Encompass Capital Advisors allocated the biggest weight to HollyFrontier Corporation (NYSE:HFC), around 1.5% of its 13F portfolio. Hi-Line Capital Management is also relatively very bullish on the stock, setting aside 1.37 percent of its 13F equity portfolio to HFC.
Because HollyFrontier Corporation (NYSE:HFC) has witnessed bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of fund managers who sold off their positions entirely by the end of the third quarter. Interestingly, Ken Griffin’s Citadel Investment Group dropped the biggest stake of the 750 funds monitored by Insider Monkey, valued at about $8.3 million in stock. Paul Tudor Jones’s fund, Tudor Investment Corp, also dropped its stock, about $5.4 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 6 funds by the end of the third quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as HollyFrontier Corporation (NYSE:HFC) but similarly valued. These stocks are SLM Corp (NASDAQ:SLM), Element Solutions Inc. (NYSE:ESI), Squarespace Inc. (NYSE:SQSP), TFS Financial Corporation (NASDAQ:TFSL), Evercore Inc. (NYSE:EVR), Glacier Bancorp, Inc. (NASDAQ:GBCI), and Twist Bioscience Corporation (NASDAQ:TWST). This group of stocks’ market valuations are closest to HFC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SLM | 27 | 891503 | 0 |
| ESI | 28 | 649935 | 5 |
| SQSP | 11 | 93960 | -1 |
| TFSL | 9 | 133035 | 0 |
| EVR | 32 | 388540 | 1 |
| GBCI | 15 | 62962 | 4 |
| TWST | 19 | 780112 | -4 |
| Average | 20.1 | 428578 | 0.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.1 hedge funds with bullish positions and the average amount invested in these stocks was $429 million. That figure was $412 million in HFC’s case. Evercore Inc. (NYSE:EVR) is the most popular stock in this table. On the other hand TFS Financial Corporation (NASDAQ:TFSL) is the least popular one with only 9 bullish hedge fund positions. HollyFrontier Corporation (NYSE:HFC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HFC is 49.6. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 gained 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately HFC wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on HFC were disappointed as the stock returned -1.8% since the end of September (through 12/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Hollyfrontier Corp (NYSE:HFC)
Follow Hollyfrontier Corp (NYSE:HFC)
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Disclosure: None. This article was originally published at Insider Monkey.
