We can judge whether Antero Resources Corp (NYSE:AR) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market when we factor in known risk factors.
Is Antero Resources Corp (NYSE:AR) the right investment to pursue these days? Hedge funds are taking a bullish view. The number of bullish hedge fund bets improved by 5 in recent months. Our calculations also showed that ar isn’t among the 30 most popular stocks among hedge funds. AR was in 27 hedge funds’ portfolios at the end of March. There were 22 hedge funds in our database with AR positions at the end of the previous quarter.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to take a look at the new hedge fund action regarding Antero Resources Corp (NYSE:AR).
How are hedge funds trading Antero Resources Corp (NYSE:AR)?
At the end of the first quarter, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of 23% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards AR over the last 15 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Baupost Group held the most valuable stake in Antero Resources Corp (NYSE:AR), which was worth $252.4 million at the end of the first quarter. On the second spot was SailingStone Capital Partners which amassed $186.4 million worth of shares. Moreover, FPR Partners, Brave Warrior Capital, and Millennium Management were also bullish on Antero Resources Corp (NYSE:AR), allocating a large percentage of their portfolios to this stock.
With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Balyasny Asset Management, managed by Dmitry Balyasny, assembled the biggest position in Antero Resources Corp (NYSE:AR). Balyasny Asset Management had $38.9 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $19.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Jim Simons’s Renaissance Technologies, Alan Fournier’s Pennant Capital Management, and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s go over hedge fund activity in other stocks similar to Antero Resources Corp (NYSE:AR). We will take a look at BRP Inc. (NASDAQ:DOOO), Coca-Cola Consolidated, Inc. (NASDAQ:COKE), The Ensign Group, Inc. (NASDAQ:ENSG), and Spectrum Brands Holdings, Inc. (NYSE:SPB). This group of stocks’ market valuations match AR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DOOO | 10 | 112063 | -1 |
| COKE | 9 | 8866 | 2 |
| ENSG | 17 | 83609 | -1 |
| SPB | 22 | 837403 | -3 |
| Average | 14.5 | 260485 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.5 hedge funds with bullish positions and the average amount invested in these stocks was $260 million. That figure was $925 million in AR’s case. Spectrum Brands Holdings, Inc. (NYSE:SPB) is the most popular stock in this table. On the other hand CCoca-Cola Consolidated, Inc. (NASDAQ:COKE) 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 calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately AR wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on AR were disappointed as the stock returned -25.8% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
