It was a rough third quarter for many hedge funds, which were naturally unable to overcome the big dip in the broad market, as the S&P 500 fell by about 7% during the quarter. The Russell 2000, composed of smaller companies, performed even worse, trailing the S&P by about 14 percentage points between June 25 and October 30, as investors fled less-known quantities for safe havens. This was the case with hedge funds, who we heard were pulling money from the market amid the volatility, which included money from small-cap stocks, which they invest in at a higher rate than other investors. This action contributed to the greater decline in these stocks during the tumultuous period. We will study how this market volatility affected their sentiment towards Suncor Energy Inc. (USA) (NYSE:SU) during the quarter below.
Suncor Energy Inc. (USA) (NYSE:SU) was in 28 hedge funds’ portfolios at the end of September. Suncor Energy Inc. (USA) (NYSE:SU) has experienced a decrease in activity from the world’s largest hedge funds lately. There were 32 hedge funds in our database with Suncor Energy Inc. (USA) (NYSE:SU) positions at the end of the previous quarter. At the end of this article, we will also compare Suncor Energy Inc. (USA) (NYSE:SU) to other stocks, including Cognizant Technology Solutions Corp (NASDAQ:CTSH), Aetna Inc. (NYSE:AET), and ASML Holding N.V. (ADR) (NASDAQ:ASML) to get a better sense of its popularity.
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With all of this in mind, let’s take a glance at the new action regarding Suncor Energy Inc. (USA) (NYSE:SU).
What does the smart money think about Suncor Energy Inc. (USA) (NYSE:SU)?
Heading into Q4, a total of 28 of the hedge funds tracked by Insider Monkey were long this stock, a drop of 13% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Berkshire Hathaway has the number one position in Suncor Energy Inc. (USA) (NYSE:SU), worth close to $801.6 million, corresponding to 0.6% of its total 13F portfolio. The second most bullish fund manager is Cliff Asness of AQR Capital Management, with a $116.4 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other peers that are bullish consist of Ken Griffin’s Citadel Investment Group, Daniel Bubis’ Tetrem Capital Management, and Robert B. Gillam’s McKinley Capital Management.
Due to the fact that Suncor Energy Inc. (USA) (NYSE:SU) has witnessed a falling interest from the entirety of the hedge funds we track, it’s safe to say that there exists a select few money managers that decided to sell off their full holdings in the third quarter. Interestingly, Alexander Mitchell’s Scopus Asset Management cut the largest stake of the 700 funds followed by Insider Monkey, comprising about $19.3 million in call options., and Daniel S. Och’s OZ Management was right behind this move, as the fund said goodbye to about $13.8 million worth of shares. These transactions are interesting, as aggregate hedge fund interest dropped by 4 funds in the third quarter.
Let’s go over hedge fund activity in other stocks similar to Suncor Energy Inc. (USA) (NYSE:SU). These stocks are Cognizant Technology Solutions Corp (NASDAQ:CTSH), Aetna Inc. (NYSE:AET), ASML Holding N.V. (ADR) (NASDAQ:ASML), and Paypal Holdings Inc (NASDAQ:PYPL). This group of stocks’ market valuations resembles Suncor Energy Inc. (USA) (NYSE:SU)’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CTSH | 49 | 1173517 | 0 |
| AET | 70 | 4587946 | -10 |
| ASML | 9 | 138344 | -4 |
| PYPL | 87 | 4942535 | 87 |
As you can see, these stocks had an average of 54 hedge funds with bullish positions and the average amount invested in these stocks was $2.71 billion. That figure was $1.33 billion in Suncor Energy Inc. (USA) (NYSE:SU)’s case. Paypal Holdings Inc (NASDAQ:PYPL) is the most popular stock in this table. On the other hand, ASML Holding N.V. (ADR) (NASDAQ:ASML) is the least popular one with only 9 bullish hedge fund positions. Suncor Energy Inc. (USA) (NYSE:SU) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Paypal Holdings Inc (NASDAQ:PYPL) might be a better candidate to consider a long position.
