Is Marathon Petroleum Corp (MPC) A Good Stock To Buy?

In this article we will analyze whether Marathon Petroleum Corp (NYSE:MPC) 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 by double digits annually.

Is MPC a good stock to buy? Marathon Petroleum Corp (NYSE:MPC) investors should pay attention to an increase in hedge fund sentiment in recent months. Marathon Petroleum Corp (NYSE:MPC) was in 46 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 72. Our calculations also showed that MPC isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

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. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Dmitry Balyasny of Balyasny Asset Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation, which is why we are checking out this inflation play. We go through lists like 10 best gold stocks to buy to identify promising stocks. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to take a peek at the key hedge fund action surrounding Marathon Petroleum Corp (NYSE:MPC).

Do Hedge Funds Think MPC Is A Good Stock To Buy Now?

At Q1’s end, a total of 46 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 7% from the fourth quarter of 2020. On the other hand, there were a total of 57 hedge funds with a bullish position in MPC a year ago. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

More specifically, Elliott Investment Management was the largest shareholder of Marathon Petroleum Corp (NYSE:MPC), with a stake worth $565.4 million reported as of the end of March. Trailing Elliott Investment Management was Millennium Management, which amassed a stake valued at $225.4 million. Laurion Capital Management, Citadel Investment Group, and Empyrean Capital Partners were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Solas Capital Management allocated the biggest weight to Marathon Petroleum Corp (NYSE:MPC), around 5.79% of its 13F portfolio. Empyrean Capital Partners is also relatively very bullish on the stock, dishing out 5.36 percent of its 13F equity portfolio to MPC.

With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. TOMS Capital, managed by Benjamin Pass, created the most outsized position in Marathon Petroleum Corp (NYSE:MPC). TOMS Capital had $62.9 million invested in the company at the end of the quarter. Robert Henry Lynch’s Aristeia Capital also initiated a $38.6 million position during the quarter. The other funds with new positions in the stock are Benjamin A. Smith’s Laurion Capital Management, Renaissance Technologies, and Dmitry Balyasny’s Balyasny Asset Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Marathon Petroleum Corp (NYSE:MPC) but similarly valued. These stocks are The Allstate Corporation (NYSE:ALL), LyondellBasell Industries NV (NYSE:LYB), International Flavors & Fragrances Inc (NYSE:IFF), Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA), STMicroelectronics N.V. (NYSE:STM), MSCI Inc (NYSE:MSCI), and Wipro Limited (NYSE:WIT). This group of stocks’ market values are similar to MPC’s market value.

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As you can see these stocks had an average of 30.9 hedge funds with bullish positions and the average amount invested in these stocks was $964 million. That figure was $1967 million in MPC’s case. International Flavors & Fragrances Inc (NYSE:IFF) is the most popular stock in this table. On the other hand Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA) is the least popular one with only 7 bullish hedge fund positions. Marathon Petroleum Corp (NYSE:MPC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MPC is 67.8. 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. 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 17.4% in 2021 through June 18th and still beat the market by 6.1 percentage points. Hedge funds were also right about betting on MPC, though not to the same extent, as the stock returned 11.1% since Q1 (through June 18th) and outperformed the market as well.

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Disclosure: None. This article was originally published at Insider Monkey.