The worries about the economic slowdown in China and the ongoing uncertainty about the path of interest-rate increases triggered several waves of equity sell-offs during the third quarter. Of course, most hedge funds and other asset managers had to stomach substantial losses during the bloody three-month period, which might have caused some to consider fleeing the U.S. equity markets. Interestingly, smaller-cap stocks registered higher losses than large-capitalization stocks during the September quarter, suggesting that institutional investors heavily discarded seemingly riskier equities amid high uncertainty and turmoil. In fact, the Russell 2000 Index lost 11.9% in the third quarter, while the Standard and Poor’s 500 benchmark declined a mere 6.4%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Murphy USA Inc (NYSE:MUSA).
Is Murphy USA Inc (NYSE:MUSA) a worthy investment now? Investors who are in the know are becoming more confident. The number of bullish hedge fund bets rose by 3 in recent months. MUSA was in 22 hedge funds’ portfolios at the end of the third quarter of 2015. There were 19 hedge funds in our database with MUSA positions at the end of the previous quarter. At the end of this article we will also compare MUSA to other stocks including Allscripts Healthcare Solutions Inc (NASDAQ:MDRX), CBL & Associates Properties, Inc. (NYSE:CBL), and PRA Health Sciences Inc (NASDAQ:PRAH) to get a better sense of its popularity.
Follow Metals Usa Holdings Corp. (NYSE:MUSA)
Follow Metals Usa Holdings Corp. (NYSE:MUSA)
At the moment there is a multitude of metrics market participants can use to evaluate publicly traded companies. Some of the less known metrics are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the best picks of the elite hedge fund managers can trounce the broader indices by a significant margin (see the details here).
Keeping this in mind, we’re going to take a look at the latest action regarding Murphy USA Inc (NYSE:MUSA).
Hedge fund activity in Murphy USA Inc (NYSE:MUSA)
Heading into Q4, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 16% from the second quarter. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, AQR Capital Management, managed by Cliff Asness, holds the biggest position in Murphy USA Inc (NYSE:MUSA). AQR Capital Management has a $55.7 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Mario Gabelli of GAMCO Investors, with a $26 million position; 0.2% of its 13F portfolio is allocated to the company. Remaining members of the smart money with similar optimism include Steve Cohen’s Point72 Asset Management, Michael Murphy and Daniel Donoghue’s Discovery Group and Jim Simons’s Renaissance Technologies.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Point72 Asset Management, managed by Steve Cohen, established the most valuable position in Murphy USA Inc (NYSE:MUSA). Point72 Asset Management had $25.2 million invested in the company at the end of the quarter. Wallace Weitz’s Wallace R. Weitz & Co. also initiated a $8.5 million position during the quarter. The other funds with new positions in the stock are Dmitry Balyasny’s Balyasny Asset Management, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Jacob Gottlieb’s Visium Asset Management.
Let’s go over hedge fund activity in other stocks similar to Murphy USA Inc (NYSE:MUSA). These stocks are Allscripts Healthcare Solutions Inc (NASDAQ:MDRX), CBL & Associates Properties, Inc. (NYSE:CBL), PRA Health Sciences Inc (NASDAQ:PRAH), and Criteo SA (ADR) (NASDAQ:CRTO). This group of stocks’ market caps are similar to MUSA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MDRX | 24 | 685662 | -4 |
| CBL | 21 | 137715 | 3 |
| PRAH | 11 | 37629 | 0 |
| CRTO | 20 | 264518 | -1 |
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $281 million. That figure was $209 million in MUSA’s case. Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) is the most popular stock in this table. On the other hand, PRA Health Sciences Inc (NASDAQ:PRAH) is the least popular one with only 11 bullish hedge fund positions. Murphy USA Inc (NYSE:MUSA) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, MDRX might be a better candidate to consider a long position.
