We at Insider Monkey have gone over 867 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of Marathon Petroleum Corp (NYSE:MPC) based on that data.
Is Marathon Petroleum Corp (NYSE:MPC) a superb investment right now? Prominent investors were turning less bullish. The number of bullish hedge fund positions were trimmed by 5 lately. Marathon Petroleum Corp (NYSE:MPC) was in 43 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 72. Our calculations also showed that MPC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
John Overdeck of Two Sigma Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Now we’re going to take a glance at the latest hedge fund action regarding Marathon Petroleum Corp (NYSE:MPC).
Do Hedge Funds Think MPC Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 43 of the hedge funds tracked by Insider Monkey were long this stock, a change of -10% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in MPC over the last 25 quarters. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
Among these funds, Elliott Investment Management held the most valuable stake in Marathon Petroleum Corp (NYSE:MPC), which was worth $653.3 million at the end of the third quarter. On the second spot was D E Shaw which amassed $631.2 million worth of shares. Laurion Capital Management, Elliott Investment Management, and Citadel Investment Group 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 Elliott Investment Management allocated the biggest weight to Marathon Petroleum Corp (NYSE:MPC), around 4.69% of its 13F portfolio. SIR Capital Management is also relatively very bullish on the stock, dishing out 3.43 percent of its 13F equity portfolio to MPC.
Due to the fact that Marathon Petroleum Corp (NYSE:MPC) has witnessed declining sentiment from hedge fund managers, it’s safe to say that there exists a select few hedge funds who sold off their full holdings in the third quarter. At the top of the heap, Steve Cohen’s Point72 Asset Management cut the largest position of the 750 funds monitored by Insider Monkey, worth about $19 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also sold off its stock, about $11.2 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 5 funds in the third quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Marathon Petroleum Corp (NYSE:MPC) but similarly valued. These stocks are Alcon Inc. (NYSE:ALC), Motorola Solutions Inc (NYSE:MSI), Cognizant Technology Solutions Corp (NASDAQ:CTSH), Ross Stores, Inc. (NASDAQ:ROST), ResMed Inc. (NYSE:RMD), Republic Services, Inc. (NYSE:RSG), and SVB Financial Group (NASDAQ:SIVB). All of these stocks’ market caps match MPC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ALC | 20 | 1263277 | -2 |
| MSI | 34 | 1266185 | -3 |
| CTSH | 29 | 2336693 | -12 |
| ROST | 41 | 1220437 | -10 |
| RMD | 28 | 396289 | 2 |
| RSG | 31 | 1222055 | -3 |
| SIVB | 45 | 1207137 | -4 |
| Average | 32.6 | 1273153 | -4.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.6 hedge funds with bullish positions and the average amount invested in these stocks was $1273 million. That figure was $2689 million in MPC’s case. SVB Financial Group (NASDAQ:SIVB) is the most popular stock in this table. On the other hand Alcon Inc. (NYSE:ALC) is the least popular one with only 20 bullish hedge fund positions. Marathon Petroleum Corp (NYSE:MPC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MPC is 63.9. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately MPC wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on MPC were disappointed as the stock returned -0.7% since the end of September (through 11/30) 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.
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Disclosure: None. This article was originally published at Insider Monkey.
