The Insider Monkey team has completed processing the quarterly 13F filings for the March quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Vine Energy Inc. (NYSE:VEI).
Is VINE a good stock to buy? Hedge funds were getting more bullish. The number of bullish hedge fund bets improved by 16 lately. Vine Energy Inc. (NYSE:VEI) was in 16 hedge funds’ portfolios at the end of March. Our calculations also showed that VEI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Israel Englander of Millennium Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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. Keeping this in mind let’s take a gander at the latest hedge fund action regarding Vine Energy Inc. (NYSE:VEI).
Do Hedge Funds Think VEI Is A Good Stock To Buy Now?
At Q1’s end, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 16 from one quarter earlier. The graph below displays the number of hedge funds with bullish position in VEI over the last 23 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Vine Energy Inc. (NYSE:VEI) was held by Encompass Capital Advisors, which reported holding $20.6 million worth of stock at the end of December. It was followed by Zimmer Partners with a $20.6 million position. Other investors bullish on the company included Adage Capital Management, Citadel Investment Group, and Millennium Management. In terms of the portfolio weights assigned to each position Covalis Capital allocated the biggest weight to Vine Energy Inc. (NYSE:VEI), around 2.82% of its 13F portfolio. Encompass Capital Advisors is also relatively very bullish on the stock, setting aside 1.61 percent of its 13F equity portfolio to VEI.
As industrywide interest jumped, specific money managers have jumped into Vine Energy Inc. (NYSE:VEI) headfirst. Encompass Capital Advisors, managed by Todd J. Kantor, initiated the biggest position in Vine Energy Inc. (NYSE:VEI). Encompass Capital Advisors had $20.6 million invested in the company at the end of the quarter. Stuart J. Zimmer’s Zimmer Partners also made a $20.6 million investment in the stock during the quarter. The other funds with brand new VEI positions are Phill Gross and Robert Atchinson’s Adage Capital Management, Ken Griffin’s Citadel Investment Group, and Israel Englander’s Millennium Management.
Let’s now take a look at hedge fund activity in other stocks similar to Vine Energy Inc. (NYSE:VEI). We will take a look at EverQuote, Inc. (NASDAQ:EVER), Veeco Instruments Inc. (NASDAQ:VECO), SFL Corporation Ltd. (NYSE:SFL), Humanigen, Inc. (NASDAQ:HGEN), Eos Energy Enterprises, Inc. (NASDAQ:EOSE), Accel Entertainment, Inc. (NYSE:ACEL), and PetIQ, Inc. (NASDAQ:PETQ). This group of stocks’ market caps are similar to VEI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EVER | 19 | 135053 | 1 |
| VECO | 20 | 381940 | 1 |
| SFL | 14 | 25172 | 0 |
| HGEN | 11 | 220502 | 6 |
| EOSE | 11 | 24885 | 1 |
| ACEL | 12 | 177573 | -2 |
| PETQ | 10 | 92659 | 1 |
| Average | 13.9 | 151112 | 1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.9 hedge funds with bullish positions and the average amount invested in these stocks was $151 million. That figure was $152 million in VEI’s case. Veeco Instruments Inc. (NASDAQ:VECO) is the most popular stock in this table. On the other hand PetIQ, Inc. (NASDAQ:PETQ) is the least popular one with only 10 bullish hedge fund positions. Vine Energy Inc. (NYSE:VEI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VEI is 58. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 28.5% in 2021 through July 23rd and beat the market again by 10.1 percentage points. Unfortunately VEI wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on VEI were disappointed as the stock returned 1.7% since the end of March (through 7/23) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Vine Energy Inc.
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Disclosure: None. This article was originally published at Insider Monkey.
