With the third-quarter round of 13F filings behind us, it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was Valero Energy Corporation (NYSE:VLO).
Valero Energy Corporation has seen an increase in enthusiasm from smart money recently. VLO was in 56 hedge funds’ portfolios at the end of September. There were 48 hedge funds in our database with VLO holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as eBay Inc (NASDAQ:EBAY), Syngenta AG (ADR) (NYSE:SYT), and Liberty Global PLC LiLAC Class A (NASDAQ:LILA) to gather more data points.
Follow Valero Energy Corp (NYSE:VLO)
Follow Valero Energy Corp (NYSE:VLO)
In the 21st-century investor’s toolkit, there are many tools shareholders employ to grade stocks. Two of the less known tools are hedge fund and insider trading activity. We have shown that, historically, those who follow the best picks of the elite fund managers can outperform the broader indices by a superb amount (see the details here).
With all of this in mind, let’s take a peek at the key action encompassing Valero Energy Corporation (NYSE:VLO).
Hedge fund activity in Valero Energy Corporation (NYSE:VLO)
At the end of the third quarter, a total of 56 of the hedge funds tracked by Insider Monkey were long this stock, a change of 17% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, D. E. Shaw’s D E Shaw has the most valuable position in Valero Energy Corporation (NYSE:VLO), worth close to $496.3 million, comprising 0.7% of its total 13F portfolio. Coming in second is AQR Capital Management, managed by Cliff Asness, which holds a $398.4 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish include Robert Joseph Caruso’s Select Equity Group, David Harding’s Winton Capital Management and Clint Carlson’s Carlson Capital.
Consequently, some big names have jumped into Valero Energy Corporation (NYSE:VLO) headfirst. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established a position in Valero Energy Corporation (NYSE:VLO). Arrowstreet Capital had $61.5 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $41.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Jonathan Barrett and Paul Segal’s Luminus Management, Jorge Paulo Lemann’s 3G Capital, and Glenn Russell Dubin’s Highbridge Capital Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Valero Energy Corporation (NYSE:VLO) but similarly valued. We will take a look at eBay Inc (NASDAQ:EBAY), Syngenta AG (ADR) (NYSE:SYT), Liberty Global PLC LiLAC Class A (NASDAQ:LILA), and Praxair, Inc. (NYSE:PX). All of these stocks’ market caps are closest to VLO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EBAY | 83 | 3681749 | -16 |
| SYT | 13 | 44954 | -3 |
| LILA | 28 | 100775 | 28 |
| PX | 29 | 749140 | -1 |
As you can see these stocks had an average of 38 hedge funds with bullish positions and the average amount invested in these stocks was $1144 million. That figure was $1843 million in VLO’s case. eBay Inc (NASDAQ:EBAY) is the most popular stock in this table. On the other hand, Syngenta AG (ADR) (NYSE:SYT) is the least popular one with only 13 bullish hedge fund positions. Valero Energy Corporation (NYSE:VLO) is not the most popular stock in this group, but it has attracted attention from the investors above average. Although this may indicate it is a stock worth considering, we’d rather spend our time researching stocks that hedge funds are collectively the fondest of and, in this case, EBAY might be a better alternative.
