The markets opened higher on Tuesday as banks gained heavily following speculation of an impending interest rate hike by the Federal Reserve. Among the stocks which are making gains today is Parsley Energy Inc (NYSE:PE), which has inched up by about 0.50% today after gaining as much as 2% earlier in the day. The now-modest gains are the result of the company announcing on Monday evening that it is going to buy assets in Pecos and Reeves Counties in Texas’ Southern Delaware Basin for $289.5 million in cash from a group of sellers. The deal includes mineral rights on 29,813 net acres and working interest covering 885 net acres for an extra $9 million. Parsley is expected to close the core deal by July 14, whereas the $9 million transaction was closed on May 10. Parsley Energy’s CEO Bryan Sheffield said in a statement that the deal is an important step towards unlocking the full potential of the company’s Southern Delaware assets.
Before we spend days researching a stock idea we’d like to take a look at how hedge funds and billionaire investors recently traded that stock. Parsley Energy Inc (NYSE:PE) has experienced an increase in activity from the world’s largest hedge funds in recent months. PE was in 36 hedge funds’ portfolios at the end of March. There were 30 hedge funds in our database with PE positions at the end of the previous quarter. At the end of this article we will also compare PE to other stocks including Bank Of The Ozarks Inc (NASDAQ:OZRK), MDU Resources Group Inc (NYSE:MDU), and DST Systems, Inc. (NYSE:DST) to get a better sense of its popularity.
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Of the funds tracked by Insider Monkey, Zimmer Partners, managed by Stuart J. Zimmer, holds the largest position in Parsley Energy Inc (NYSE:PE). Zimmer Partners has a $148.2 million position in the stock, comprising 6.2% of its 13F portfolio. On Zimmer Partners’ heels is Millennium Management, led by Israel Englander, holding a $140.8 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Other peers with similar optimism comprise John Labanowski’s Brenham Capital Management, Clint Carlson’s Carlson Capital, and Vince Maddi and Shawn Brennan’s SIR Capital Management.
On the next page we’ll look at some funds that took up positions in PE during Q1, as well as compare the stock to a handful of others with similar market caps.
Key hedge funds were breaking ground in PE during the first quarter. Graham Capital Management, managed by Kenneth Tropin, created the most outsized position in Parsley Energy Inc (NYSE:PE). Graham Capital Management had $17 million invested in the company at the end of the quarter. Charles Davidson’s Wexford Capital also made a $13.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Scott Phillips’ Latimer Light Capital, Charles Clough’s Clough Capital Partners, and Rob Citrone’s Discovery Capital Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Parsley Energy Inc (NYSE:PE) but similarly valued. We will take a look at Bank Of The Ozarks Inc (NASDAQ:OZRK), MDU Resources Group Inc (NYSE:MDU), DST Systems, Inc. (NYSE:DST), and PTC Inc (NASDAQ:PTC). This group of stocks’ market caps are closest to PE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OZRK | 20 | 229725 | 5 |
| MDU | 16 | 59408 | 3 |
| DST | 22 | 404996 | 5 |
| PTC | 31 | 701460 | -4 |
As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $349 million. That figure was $720 million in PE’s case. PTC Inc (NASDAQ:PTC) is the most popular stock in this table. On the other hand MDU Resources Group Inc (NYSE:MDU) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Parsley Energy Inc (NYSE:PE) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers and their bullishness is growing, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None
