Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 817 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Occidental Petroleum Corporation (NYSE:OXY), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is OXY a good stock to buy now? Occidental Petroleum Corporation (NYSE:OXY) investors should be aware of an increase in hedge fund interest recently. Occidental Petroleum Corporation (NYSE:OXY) was in 43 hedge funds’ portfolios at the end of September. The all time high for this statistic is 62. Our calculations also showed that OXY isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most traders, hedge funds are viewed as underperforming, outdated investment vehicles of years past. While there are more than 8000 funds with their doors open at present, Our researchers look at the upper echelon of this group, about 850 funds. These hedge fund managers watch over the lion’s share of all hedge funds’ total asset base, and by watching their top stock picks, Insider Monkey has unsheathed numerous investment strategies that have historically surpassed the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
Robert Atchinson of Adage Capital Management
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Do Hedge Funds Think OXY Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 43 of the hedge funds tracked by Insider Monkey were long this stock, a change of 26% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in OXY over the last 21 quarters. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
The largest stake in Occidental Petroleum Corporation (NYSE:OXY) was held by Icahn Capital LP, which reported holding $887.2 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $68.1 million position. Other investors bullish on the company included Icahn Capital LP, Adage Capital Management, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Icahn Capital LP allocated the biggest weight to Occidental Petroleum Corporation (NYSE:OXY), around 5.11% of its 13F portfolio. Arosa Capital Management is also relatively very bullish on the stock, earmarking 1.35 percent of its 13F equity portfolio to OXY.
As aggregate interest increased, some big names were leading the bulls’ herd. Icahn Capital LP, managed by Carl Icahn, established the most valuable position in Occidental Petroleum Corporation (NYSE:OXY). Icahn Capital LP had $57.9 million invested in the company at the end of the quarter. Phill Gross and Robert Atchinson’s Adage Capital Management also made a $40.1 million investment in the stock during the quarter. The following funds were also among the new OXY investors: Benjamin A. Smith’s Laurion Capital Management, Farhad Nanji and Michael DeMichele’s MFN Partners, and Till Bechtolsheimer’s Arosa Capital Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Occidental Petroleum Corporation (NYSE:OXY) but similarly valued. We will take a look at Agnico Eagle Mines Limited (NYSE:AEM), Edison International (NYSE:EIX), KKR & Co Inc. (NYSE:KKR), W.W. Grainger, Inc. (NYSE:GWW), Equity Residential (NYSE:EQR), Marathon Petroleum Corp (NYSE:MPC), and Fortinet Inc (NASDAQ:FTNT). This group of stocks’ market valuations resemble OXY’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AEM | 28 | 667215 | -2 |
| EIX | 28 | 1125066 | -9 |
| KKR | 50 | 3657048 | 5 |
| GWW | 28 | 391187 | 0 |
| EQR | 27 | 526296 | -6 |
| MPC | 56 | 1071467 | -6 |
| FTNT | 36 | 1291884 | -8 |
| Average | 36.1 | 1247166 | -3.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 36.1 hedge funds with bullish positions and the average amount invested in these stocks was $1247 million. That figure was $1174 million in OXY’s case. Marathon Petroleum Corp (NYSE:MPC) is the most popular stock in this table. On the other hand Equity Residential (NYSE:EQR) is the least popular one with only 27 bullish hedge fund positions. Occidental Petroleum Corporation (NYSE:OXY) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for OXY is 58.4. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. Hedge funds were also right about betting on OXY as the stock returned 91.1% since the end of Q3 (through 12/8) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Occidental Petroleum Corp (NYSE:OXY)
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Disclosure: None. This article was originally published at Insider Monkey.
