We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. Keeping this in mind, let’s take a look at whether Geopark Ltd (NYSE:GPRK) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Geopark Ltd (NYSE:GPRK) shareholders have witnessed an increase in hedge fund interest in recent months. GPRK was in 11 hedge funds’ portfolios at the end of December. There were 8 hedge funds in our database with GPRK holdings at the end of the previous quarter. Our calculations also showed that GPRK isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
Jim Simons of Renaissance Technologies
We leave no stone unturned when looking for the next great investment idea. For example, COVID-19 pandemic is still the main driver of stock prices. So we are checking out this trader’s corona catalyst trades. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to take a gander at the key hedge fund action regarding Geopark Ltd (NYSE:GPRK).
Hedge fund activity in Geopark Ltd (NYSE:GPRK)
At Q4’s end, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 38% from the previous quarter. By comparison, 13 hedge funds held shares or bullish call options in GPRK a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, holds the number one position in Geopark Ltd (NYSE:GPRK). Renaissance Technologies has a $99.7 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Encompass Capital Advisors, led by Todd J. Kantor, holding a $22.1 million position; 1.4% of its 13F portfolio is allocated to the stock. Some other professional money managers that are bullish comprise D. E. Shaw’s D E Shaw, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position Encompass Capital Advisors allocated the biggest weight to Geopark Ltd (NYSE:GPRK), around 1.41% of its 13F portfolio. Navellier & Associates is also relatively very bullish on the stock, dishing out 0.13 percent of its 13F equity portfolio to GPRK.
With a general bullishness amongst the heavyweights, specific money managers have jumped into Geopark Ltd (NYSE:GPRK) headfirst. Encompass Capital Advisors, managed by Todd J. Kantor, initiated the biggest position in Geopark Ltd (NYSE:GPRK). Encompass Capital Advisors had $22.1 million invested in the company at the end of the quarter. Minhua Zhang’s Weld Capital Management also made a $0.5 million investment in the stock during the quarter. The only other fund with a brand new GPRK position is Ken Griffin’s Citadel Investment Group.
Let’s now take a look at hedge fund activity in other stocks similar to Geopark Ltd (NYSE:GPRK). These stocks are Southwestern Energy Company (NYSE:SWN), PC Connection, Inc. (NASDAQ:CNXN), Trupanion Inc (NYSE:TRUP), and Sandstorm Gold Ltd. (NYSE:SAND). All of these stocks’ market caps are similar to GPRK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SWN | 15 | 149446 | 1 |
| CNXN | 15 | 75446 | 4 |
| TRUP | 13 | 209570 | 2 |
| SAND | 13 | 84440 | -2 |
| Average | 14 | 129726 | 1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $130 million. That figure was $144 million in GPRK’s case. Southwestern Energy Company (NYSE:SWN) is the most popular stock in this table. On the other hand Trupanion Inc (NYSE:TRUP) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Geopark Ltd (NYSE:GPRK) is even less popular than TRUP. Hedge funds dodged a bullet by taking a bearish stance towards GPRK. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 1.0% in 2020 through May 1st but managed to beat the market by 12.9 percentage points. Unfortunately GPRK wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); GPRK investors were disappointed as the stock returned -58.9% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
