A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Phillips 66 (NYSE:PSX).
Is Phillips 66 (NYSE:PSX) undervalued? Money managers are getting more optimistic. The number of long hedge fund positions went up by 3 recently. PSX was in 29 hedge funds’ portfolios at the end of September. There were 26 hedge funds in our database with PSX holdings at the end of the previous quarter. At the end of this article we will also compare PSX to other stocks including Target Corporation (NYSE:TGT), BCE Inc. (USA) (NYSE:BCE), and Infosys Ltd ADR (NYSE:INFY) to get a better sense of its popularity.
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How are hedge funds trading Phillips 66 (NYSE:PSX)?
Heading into the fourth quarter of 2016, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a rise of 12% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Warren Buffett’s Berkshire Hathaway has the number one position in Phillips 66 (NYSE:PSX), worth close to $6.5 billion, comprising 5% of its total 13F portfolio. The second most bullish fund manager is East Side Capital (RR Partners), led by Steven Richman, holding a $188 million position; 9.1% of its 13F portfolio is allocated to the stock. Remaining members of the smart money that hold long positions contain D. E. Shaw’s D E Shaw, Cliff Asness’ AQR Capital Management and David Cohen and Harold Levy’s Iridian Asset Management.
Now, specific money managers were breaking ground themselves. Masters Capital Management, managed by Mike Masters, created the most valuable call position in Phillips 66 (NYSE:PSX). Masters Capital Management had $80.6 million invested in the company at the end of the quarter. Michael Kaine’s Numina Capital also made a $37.2 million investment in the stock during the quarter. The other funds with brand new PSX positions are Paul Marshall and Ian Wace’s Marshall Wace LLP, Ken Griffin’s Citadel Investment Group, and George Hall’s Clinton Group.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Phillips 66 (NYSE:PSX) but similarly valued. These stocks are Target Corporation (NYSE:TGT), BCE Inc. (USA) (NYSE:BCE), Infosys Ltd ADR (NYSE:INFY), and Bank of Montreal (USA) (NYSE:BMO). This group of stocks’ market values match PSX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TGT | 30 | 702816 | -2 |
| BCE | 16 | 189689 | 1 |
| INFY | 20 | 822886 | -3 |
| BMO | 16 | 219051 | 1 |
As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $484 million. That figure was $7.32 billion in PSX’s case. Target Corporation (NYSE:TGT) is the most popular stock in this table. On the other hand BCE Inc. (USA) (NYSE:BCE) is the least popular one with only 16 bullish hedge fund positions. Phillips 66 (NYSE:PSX) 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 TGT might be a better candidate to consider a long position.
Disclosure: None
