Was The Smart Money Right About Ovintiv Inc. (OVV)?

The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought Ovintiv Inc. (NYSE:OVV) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.

Is Ovintiv Inc. (NYSE:OVV) the right pick for your portfolio? Hedge funds were getting more bullish. The number of long hedge fund bets improved by 4 recently. Ovintiv Inc. (NYSE:OVV) was in 44 hedge funds’ portfolios at the end of September. The all time high for this statistic is 44. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that OVV isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 40 hedge funds in our database with OVV positions at the end of the second quarter.

Ken Heebner of Capital Growth Management

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. Keeping this in mind we’re going to take a glance at the recent hedge fund action encompassing Ovintiv Inc. (NYSE:OVV).

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

At the end of September, a total of 44 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 OVV over the last 25 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Two Sigma Advisors, managed by John Overdeck and David Siegel, holds the most valuable position in Ovintiv Inc. (NYSE:OVV). Two Sigma Advisors has a $99 million position in the stock, comprising 0.3% of its 13F portfolio. On Two Sigma Advisors’s heels is Maple Rock Capital, managed by Len Kipp and Xavier Majic, which holds a $88.5 million position; 12.4% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors with similar optimism encompass Israel Englander’s Millennium Management, Steve Cohen’s Point72 Asset Management and Stephen Mildenhall’s Contrarius Investment Management. In terms of the portfolio weights assigned to each position Maple Rock Capital allocated the biggest weight to Ovintiv Inc. (NYSE:OVV), around 12.4% of its 13F portfolio. Yaupon Capital is also relatively very bullish on the stock, earmarking 3.47 percent of its 13F equity portfolio to OVV.

As aggregate interest increased, some big names have been driving this bullishness. Anomaly Capital Management, managed by Ben Jacobs, initiated the most valuable position in Ovintiv Inc. (NYSE:OVV). Anomaly Capital Management had $23 million invested in the company at the end of the quarter. Till Bechtolsheimer’s Arosa Capital Management also made a $9.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Ken Heebner’s Capital Growth Management, Steve Pattyn’s Yaupon Capital, and Crispin Odey’s Odey Asset Management Group.

Let’s also examine hedge fund activity in other stocks similar to Ovintiv Inc. (NYSE:OVV). We will take a look at The Gap Inc. (NYSE:GPS), CRISPR Therapeutics AG (NASDAQ:CRSP), Jabil Inc. (NYSE:JBL), Vertiv Holdings Co (NYSE:VRT), Knight-Swift Transportation Holdings Inc. (NYSE:KNX), Hyatt Hotels Corporation (NYSE:H), and IPG Photonics Corporation (NASDAQ:IPGP). This group of stocks’ market valuations are closest to OVV’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 31 hedge funds with bullish positions and the average amount invested in these stocks was $659 million. That figure was $684 million in OVV’s case. CRISPR Therapeutics AG (NASDAQ:CRSP) is the most popular stock in this table. On the other hand Knight-Swift Transportation Holdings Inc. (NYSE:KNX) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks Ovintiv Inc. (NYSE:OVV) is more popular among hedge funds. Our overall hedge fund sentiment score for OVV is 89. 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 returned 29.6% in 2021 and managed to beat the market by another 3.6 percentage points. Hedge funds were also right about betting on OVV as the stock returned 18.5% since the end of September (through 1/31) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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

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