Between June 25 and October 30th the Russell 2000 ETF (IWM) lagged the larger S&P 500 ETF (SPY) by more than 14 percentage points as investors worried over the possible ramifications of rising interest rates. The hedge funds and institutional investors we track typically invest more in smaller-cap stocks than an average investor, and we have seen data that shows those funds paring back their overall exposure. Those funds cutting positions in small-caps is one reason why volatility has increased. In the following paragraphs, we take a closer look at what hedge funds and prominent investors think of Willbros Group Inc (NYSE:WG) and see how the stock is affected by the recent hedge fund activity.
Is Willbros Group Inc (NYSE:WG) a buy, sell, or hold? Investors who are in the know are taking a pessimistic view. The number of bullish hedge fund bets fell by 5 in recent months. The shares of Willbros Group Inc (NYSE:WG) declined 1.56% during the last quarter, so it is unlikely to have an impact over the hedge fund behavior. For a better understanding of the hedge fund movement, we will cover hedge funds that held stakes in Willbros Group Inc (NYSE:WG) at the end of the third quarter.
To get a clear picture of the hedge fund sentiment around stocks with similar market cap, we will also compare WG to other stocks, including TCP International Holdings Ltd (NYSE:TCPI), Cancer Genetics Inc (NASDAQ:CGIX), and Petroquest Energy Inc (NYSE:PQ) to get a better sense of its popularity.
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In the eyes of most market participants, hedge funds are seen as underperforming, old investment tools of the past. While there are more than 8000 funds in operation at the moment, Our experts look at the leaders of this group, about 700 funds. It is estimated that this group of investors watches over bulk of the hedge fund industry’s total asset base, and by observing their highest performing equity investments, Insider Monkey has determined various investment strategies that have historically outstripped Mr. Market. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points a year for a decade in their back tests.
Now, let’s check out the key action regarding Willbros Group Inc (NYSE:WG).
How are hedge funds trading Willbros Group Inc (NYSE:WG)?
At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a drop of 42% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Jeffrey Gendell’s Tontine Asset Management has the number one position in Willbros Group Inc (NYSE:WG), worth close to $5.1 million, comprising 1.1% of its total 13F portfolio. Coming in second is Prescott Group Capital Management, led by Phil Frohlich, holding a $1.2 million position; 0.3% of its 13F portfolio is allocated to the stock. Some other members of the smart money that are bullish contain Renaissance Technologies, D E Shaw, and Israel Englander’s Millennium Management.
Seeing as Willbros Group Inc (NYSE:WG) has faced a bearish sentiment from hedge fund managers, logic holds that there is a sect of hedge funds who were dropping their full holdings last quarter. It’s worth mentioning that Cliff Asness’ AQR Capital Management sold off the largest stake of the 700 funds monitored by Insider Monkey, comprising about $0.3 million in stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund sold off about $0.1 million worth of shares. These transactions are interesting, as total hedge fund interest dropped by 5 funds last quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Willbros Group Inc (NYSE:WG) but similarly valued. These stocks are TCP International Holdings Ltd (NYSE:TCPI), Cancer Genetics Inc (NASDAQ:CGIX), Petroquest Energy Inc (NYSE:PQ), and Timberland Bancorp, Inc. (NASDAQ:TSBK). All of these stocks’ market caps match Willbros Group Inc (NYSE:WG)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TCPI | 6 | 5354 | 1 |
| CGIX | 4 | 1120 | -1 |
| PQ | 11 | 9902 | -3 |
| TSBK | 5 | 13738 | 0 |
As you can see, these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $8 million. That figure was $7 million in Willbros Group Inc (NYSE:WG)’s case. Petroquest Energy Inc (NYSE:PQ) is the most popular stock in this table. On the other hand, Cancer Genetics Inc (NASDAQ:CGIX) is the least popular one with only 4 bullish hedge fund positions. Willbros Group Inc (NYSE:WG) 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, Petroquest Energy Inc (NYSE:PQ) might be a better candidate to consider a long position.
