There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other elite funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Anadarko Petroleum Corporation (NYSE:APC).
Investors who are in the know are betting on Anadarko, as the number of long hedge fund bets advanced by 17 lately. In this way, 65 funds tracked by Insider Monkey held shares of the company at the end of the third quarter of 2016. At the end of this article we will also compare APC to other stocks including Sherwin-Williams Company (NYSE:SHW), LIBERTY GLOBAL PLC (NASDAQ:LBTYK), and Manulife Financial Corporation (USA) (NYSE:MFC) to get a better sense of its popularity.
Follow Anadarko Petroleum Corp (NYSE:APC)
Follow Anadarko Petroleum Corp (NYSE:APC)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Keeping this in mind, we’re going to take a look at the latest action regarding Anadarko Petroleum Corporation (NYSE:APC).
What have hedge funds been doing with Anadarko Petroleum Corporation (NYSE:APC)?
At the end of the third quarter, a total of 65 of the hedge fund followed by us held shares of Anadarko Petroleum, up by 35% over the quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Viking Global, managed by Andreas Halvorsen, holds the biggest position in Anadarko Petroleum Corporation (NYSE:APC). Viking Global has a $541 million position in the stock, comprising 2.3% of its 13F portfolio. Coming in second is Adage Capital Management, managed by Phill Gross and Robert Atchinson, which holds a $420.5 million position; the fund has 1.2% of its 13F portfolio invested in the stock. Other peers that are bullish contain Ken Griffin’s Citadel Investment Group, Israel Englander’s Millennium Management, and Boykin Curry’s Eagle Capital Management.
As industrywide interest jumped, key money managers have been driving this bullishness. Zimmer Partners, managed by Stuart J. Zimmer, created the most outsized position in Anadarko Petroleum Corporation (NYSE:APC). Zimmer Partners had $221.8 million invested in the company at the end of the quarter. Zach Schreiber’s Point State Capital also made a $104.5 million investment in the stock during the quarter. The other funds with brand new APC positions are Daniel S. Och’s OZ Management, John Lykouretzos’s Hoplite Capital Management, and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s go over hedge fund activity in other stocks similar to Anadarko Petroleum Corporation (NYSE:APC). These stocks are Sherwin-Williams Company (NYSE:SHW), LIBERTY GLOBAL PLC (NASDAQ:LBTYK), Manulife Financial Corporation (USA) (NYSE:MFC), and Equinix Inc (NASDAQ:EQIX). 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 |
|---|---|---|---|
| SHW | 50 | 2237039 | 5 |
| LBTYK | 56 | 5713173 | -4 |
| MFC | 13 | 197047 | -3 |
| EQIX | 42 | 2131549 | 1 |
As you can see these stocks had an average of 40 investors holding shares and the average amount invested in these stocks was $2.57 billion. That figure was $3.90 billion in APC’s case. LIBERTY GLOBAL PLC (NASDAQ:LBTYK) is the most popular stock in this table. On the other hand Manulife Financial Corporation (USA) (NYSE:MFC) 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. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
