The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Antero Resources Corp (NYSE:AR).
Antero Resources Corp (NYSE:AR) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 21 hedge funds’ portfolios at the end of the third quarter of 2020. Our calculations also showed that AR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). At the end of this article we will also compare AR to other stocks including Rosetta Stone Inc (NYSE:RST), Costamare Inc (NYSE:CMRE), and Axcelis Technologies Inc (NASDAQ:ACLS) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Steven Cohen of Point72 Asset Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind let’s review the key hedge fund action regarding Antero Resources Corp (NYSE:AR).
Do Hedge Funds Think AR Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the second quarter of 2020. By comparison, 27 hedge funds held shares or bullish call options in AR a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, FPR Partners was the largest shareholder of Antero Resources Corp (NYSE:AR), with a stake worth $48.9 million reported as of the end of September. Trailing FPR Partners was SailingStone Capital Partners, which amassed a stake valued at $43.6 million. Shah Capital Management, Citadel Investment Group, and Encompass Capital Advisors 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 SailingStone Capital Partners allocated the biggest weight to Antero Resources Corp (NYSE:AR), around 16.75% of its 13F portfolio. Shah Capital Management is also relatively very bullish on the stock, dishing out 14.68 percent of its 13F equity portfolio to AR.
Because Antero Resources Corp (NYSE:AR) has faced falling interest from the smart money, we can see that there exists a select few funds that decided to sell off their full holdings last quarter. At the top of the heap, Anand Parekh’s Alyeska Investment Group sold off the largest investment of all the hedgies followed by Insider Monkey, comprising an estimated $1.9 million in stock. David Andre and Astro Teller’s fund, Cerebellum Capital, also said goodbye to its stock, about $1.6 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Antero Resources Corp (NYSE:AR) but similarly valued. We will take a look at Rosetta Stone Inc (NYSE:RST), Costamare Inc (NYSE:CMRE), Axcelis Technologies Inc (NASDAQ:ACLS), China Yuchai International Limited (NYSE:CYD), Benchmark Electronics, Inc. (NYSE:BHE), Agenus Inc (NASDAQ:AGEN), and Standex International Corp. (NYSE:SXI). This group of stocks’ market caps are closest to AR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RST | 26 | 191347 | 5 |
| CMRE | 13 | 32878 | 0 |
| ACLS | 20 | 88812 | 0 |
| CYD | 10 | 80331 | 3 |
| BHE | 10 | 21753 | -4 |
| AGEN | 13 | 57826 | -2 |
| SXI | 11 | 34962 | -1 |
| Average | 14.7 | 72558 | 0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.7 hedge funds with bullish positions and the average amount invested in these stocks was $73 million. That figure was $204 million in AR’s case. Rosetta Stone Inc (NYSE:RST) is the most popular stock in this table. On the other hand China Yuchai International Limited (NYSE:CYD) is the least popular one with only 10 bullish hedge fund positions. Antero Resources Corp (NYSE:AR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AR is 51.7. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on AR as the stock returned 79.6% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
