The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at 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. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded Diamondback Energy Inc (NASDAQ:FANG) and determine whether the smart money was really smart about this stock.
Is Diamondback Energy Inc (NASDAQ:FANG) a buy here? Investors who are in the know were taking an optimistic view. The number of bullish hedge fund positions moved up by 13 lately. Diamondback Energy Inc (NASDAQ:FANG) was in 51 hedge funds’ portfolios at the end of September. The all time high for this statistic was previously 47. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that FANG isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 38 hedge funds in our database with FANG holdings at the end of June.
Ken Griffin of Citadel Investment Group
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 let’s go over the fresh hedge fund action regarding Diamondback Energy Inc (NASDAQ:FANG).
Do Hedge Funds Think FANG Is A Good Stock To Buy Now?
At third quarter’s end, a total of 51 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 34% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards FANG over the last 25 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Diamondback Energy Inc (NASDAQ:FANG) was held by Holocene Advisors, which reported holding $134 million worth of stock at the end of September. It was followed by Millennium Management with a $95.4 million position. Other investors bullish on the company included Miller Value Partners, Citadel Investment Group, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Key Square Capital Management allocated the biggest weight to Diamondback Energy Inc (NASDAQ:FANG), around 6.32% of its 13F portfolio. Hill City Capital is also relatively very bullish on the stock, setting aside 3.81 percent of its 13F equity portfolio to FANG.
With a general bullishness amongst the heavyweights, key money managers were leading the bulls’ herd. Woodson Capital Management, managed by James Woodson Davis, initiated the most outsized position in Diamondback Energy Inc (NASDAQ:FANG). Woodson Capital Management had $26.6 million invested in the company at the end of the quarter. Vince Maddi and Shawn Brennan’s SIR Capital Management also made a $23.7 million investment in the stock during the quarter. The other funds with brand new FANG positions are Scott Bessent’s Key Square Capital Management, Renaissance Technologies, and David Harding’s Winton Capital Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Diamondback Energy Inc (NASDAQ:FANG) but similarly valued. These stocks are NVR, Inc. (NYSE:NVR), Bentley Systems, Incorporated (NASDAQ:BSY), Entegris Inc (NASDAQ:ENTG), Akamai Technologies, Inc. (NASDAQ:AKAM), PagSeguro Digital Ltd. (NYSE:PAGS), Continental Resources, Inc. (NYSE:CLR), and Wheaton Precious Metals Corp. (NYSE:WPM). This group of stocks’ market valuations are closest to FANG’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NVR | 32 | 480486 | 4 |
| BSY | 18 | 141737 | 1 |
| ENTG | 26 | 1505122 | 1 |
| AKAM | 30 | 327872 | 0 |
| PAGS | 41 | 2446922 | 1 |
| CLR | 24 | 166253 | 1 |
| WPM | 27 | 347520 | 1 |
| Average | 28.3 | 773702 | 1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.3 hedge funds with bullish positions and the average amount invested in these stocks was $774 million. That figure was $802 million in FANG’s case. PagSeguro Digital Ltd. (NYSE:PAGS) is the most popular stock in this table. On the other hand Bentley Systems, Incorporated (NASDAQ:BSY) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks Diamondback Energy Inc (NASDAQ:FANG) is more popular among hedge funds. Our overall hedge fund sentiment score for FANG is 90. 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 FANG as the stock returned 33.8% 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.
Follow Diamondback Energy Inc. (NASDAQ:FANG)
Follow Diamondback Energy Inc. (NASDAQ:FANG)
Suggested Articles:
- 10 Best Steel Stocks To Buy
- 12 Best Large-cap Biotech Stocks To Buy Now
- Billionaire Stan Druckenmiller’s Top 10 Stock Picks
Disclosure: None. This article was originally published at Insider Monkey.
