Ovintiv Inc. (OVV): Hedge Funds Are Snapping Up

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Ovintiv Inc. (NYSE:OVV).

Is Ovintiv Inc. (NYSE:OVV) a cheap investment right now? Investors who are in the know were taking an optimistic view. The number of long hedge fund positions rose by 10 lately. Ovintiv Inc. (NYSE:OVV) was in 40 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 44. Our calculations also showed that OVV isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 30 hedge funds in our database with OVV holdings at the end of March.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

John Overdeck of Two Sigma Advisors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, we like undervalued, EBITDA-positive growth stocks, so we are checking out stock pitches like this emerging biotech stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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. With all of this in mind let’s review the latest hedge fund action encompassing Ovintiv Inc. (NYSE:OVV).

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

At Q2’s end, a total of 40 of the hedge funds tracked by Insider Monkey were long this stock, a change of 33% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in OVV over the last 24 quarters. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

More specifically, Two Sigma Advisors was the largest shareholder of Ovintiv Inc. (NYSE:OVV), with a stake worth $123.6 million reported as of the end of June. Trailing Two Sigma Advisors was Arrowstreet Capital, which amassed a stake valued at $89 million. Maple Rock Capital, Citadel Investment Group, and D E Shaw were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Maple Rock Capital allocated the biggest weight to Ovintiv Inc. (NYSE:OVV), around 11.01% of its 13F portfolio. SIR Capital Management is also relatively very bullish on the stock, setting aside 3.31 percent of its 13F equity portfolio to OVV.

As industrywide interest jumped, some big names have been driving this bullishness. Millennium Management, managed by Israel Englander, established the largest position in Ovintiv Inc. (NYSE:OVV). Millennium Management had $28.1 million invested in the company at the end of the quarter. Stephen Mildenhall’s Contrarius Investment Management also made a $22.6 million investment in the stock during the quarter. The following funds were also among the new OVV investors: Michael Burry’s Scion Asset Management, Robert Bishop’s Impala Asset Management, and Mark Coe’s Intrinsic Edge Capital.

Let’s now review 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 Plains All American Pipeline, L.P. (NASDAQ:PAA), APA Corporation (NASDAQ:APA), First Citizens BancShares Inc. (NASDAQ:FCNCA), Fate Therapeutics Inc (NASDAQ:FATE), ContextLogic Inc. (NASDAQ:WISH), Kilroy Realty Corp (NYSE:KRC), and Nutanix, Inc. (NASDAQ:NTNX). This group of stocks’ market values are similar to OVV’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 25.9 hedge funds with bullish positions and the average amount invested in these stocks was $812 million. That figure was $739 million in OVV’s case. Fate Therapeutics Inc (NASDAQ:FATE) is the most popular stock in this table. On the other hand Plains All American Pipeline, L.P. (NASDAQ:PAA) is the least popular one with only 7 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 87.3. 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 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 21.8% in 2021 through October 11th and still beat the market by 4.4 percentage points. Hedge funds were also right about betting on OVV as the stock returned 21.5% since the end of Q2 (through 10/11) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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