Is OVV Stock A Buy or Sell?

In this article you are going to find out whether hedge funds think Ovintiv Inc. (NYSE:OVV) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

Is OVV stock a buy? Ovintiv Inc. (NYSE:OVV) investors should be aware of an increase in activity from the world’s largest hedge funds lately. Ovintiv Inc. (NYSE:OVV) was in 26 hedge funds’ portfolios at the end of December. The all time high for this statistic is 44. There were 20 hedge funds in our database with OVV holdings at the end of September. Our calculations also showed that OVV isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here).

Clint Carlson of Carlson Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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 website. Keeping this in mind let’s check out the fresh hedge fund action regarding Ovintiv Inc. (NYSE:OVV).

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

At fourth quarter’s end, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 30% from the third quarter of 2020. The graph below displays the number of hedge funds with bullish position in OVV over the last 22 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, holds the largest position in Ovintiv Inc. (NYSE:OVV). Arrowstreet Capital has a $78.8 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Two Sigma Advisors, managed by John Overdeck and David Siegel, which holds a $36.3 million position; 0.1% of its 13F portfolio is allocated to the company. Some other peers that hold long positions consist of Len Kipp and Xavier Majic’s Maple Rock Capital, Ken Griffin’s Citadel Investment Group and Steve Cohen’s Point72 Asset Management. In terms of the portfolio weights assigned to each position Maple Rock Capital allocated the biggest weight to Ovintiv Inc. (NYSE:OVV), around 4.65% of its 13F portfolio. Arosa Capital Management is also relatively very bullish on the stock, dishing out 0.39 percent of its 13F equity portfolio to OVV.

With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Maple Rock Capital, managed by Len Kipp and Xavier Majic, established the biggest position in Ovintiv Inc. (NYSE:OVV). Maple Rock Capital had $32 million invested in the company at the end of the quarter. Anand Parekh’s Alyeska Investment Group also initiated a $12.3 million position during the quarter. The other funds with new positions in the stock are Dmitry Balyasny’s Balyasny Asset Management, Clint Carlson’s Carlson Capital, and Till Bechtolsheimer’s Arosa Capital Management.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Ovintiv Inc. (NYSE:OVV) but similarly valued. We will take a look at BlackBerry Limited (NYSE:BB), Balchem Corporation (NASDAQ:BCPC), Select Medical Holdings Corporation (NYSE:SEM), Ryman Hospitality Properties, Inc. (NYSE:RHP), Bandwidth Inc. (NASDAQ:BAND), Valmont Industries, Inc. (NYSE:VMI), and Advanced Energy Industries, Inc. (NASDAQ:AEIS). This group of stocks’ market values match OVV’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 22.6 hedge funds with bullish positions and the average amount invested in these stocks was $279 million. That figure was $239 million in OVV’s case. BlackBerry Limited (NYSE:BB) is the most popular stock in this table. On the other hand Balchem Corporation (NASDAQ:BCPC) is the least popular one with only 13 bullish hedge fund positions. Ovintiv Inc. (NYSE:OVV) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for OVV is 63.8. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and still beat the market by 0.9 percentage points. Hedge funds were also right about betting on OVV as the stock returned 63.3% since the end of Q4 (through 4/19) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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