We at Insider Monkey have gone over 866 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article, we look at what those funds think of Halliburton Company (NYSE:HAL) based on that data.
Halliburton Company (NYSE:HAL) has experienced a decrease in support from the world’s most elite money managers recently. Halliburton Company (NYSE:HAL) was in 28 hedge funds’ portfolios at the end of March. The all time high for this statistic is 62. There were 31 hedge funds in our database with HAL holdings at the end of December. Our calculations also showed that HAL isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Richard S. Pzena of Pzena Investment Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery 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. 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 homepage. With all of this in mind let’s check out the recent hedge fund action regarding Halliburton Company (NYSE:HAL).
Do Hedge Funds Think HAL Is A Good Stock To Buy Now?
At the end of March, a total of 28 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -10% from the previous quarter. On the other hand, there were a total of 32 hedge funds with a bullish position in HAL 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.
Among these funds, Pzena Investment Management held the most valuable stake in Halliburton Company (NYSE:HAL), which was worth $768.1 million at the end of the fourth quarter. On the second spot was Fisher Asset Management which amassed $83.9 million worth of shares. Holocene Advisors, Two Sigma Advisors, and Marshall Wace LLP 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 Pzena Investment Management allocated the biggest weight to Halliburton Company (NYSE:HAL), around 3.12% of its 13F portfolio. SIR Capital Management is also relatively very bullish on the stock, designating 0.63 percent of its 13F equity portfolio to HAL.
Judging by the fact that Halliburton Company (NYSE:HAL) has witnessed bearish sentiment from hedge fund managers, we can see that there was a specific group of fund managers that decided to sell off their full holdings by the end of the first quarter. Interestingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital sold off the largest stake of the 750 funds monitored by Insider Monkey, worth about $6.7 million in stock, and Clint Carlson’s Carlson Capital was right behind this move, as the fund cut about $6.5 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 3 funds by the end of the first quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Halliburton Company (NYSE:HAL) but similarly valued. These stocks are DISH Network Corp. (NASDAQ:DISH), Xylem Inc (NYSE:XYL), StoneCo Ltd. (NASDAQ:STNE), The Cooper Companies, Inc. (NYSE:COO), FirstEnergy Corp. (NYSE:FE), MGM Resorts International (NYSE:MGM), and Farfetch Limited (NYSE:FTCH). All of these stocks’ market caps resemble HAL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DISH | 51 | 2205763 | -6 |
| XYL | 23 | 846370 | 2 |
| STNE | 39 | 2157227 | -8 |
| COO | 43 | 1378040 | 12 |
| FE | 51 | 1840599 | 1 |
| MGM | 57 | 2715848 | 13 |
| FTCH | 57 | 3095281 | 10 |
| Average | 45.9 | 2034161 | 3.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 45.9 hedge funds with bullish positions and the average amount invested in these stocks was $2034 million. That figure was $1016 million in HAL’s case. MGM Resorts International (NYSE:MGM) is the most popular stock in this table. On the other hand Xylem Inc (NYSE:XYL) is the least popular one with only 23 bullish hedge fund positions. Halliburton Company (NYSE:HAL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for HAL is 22.9. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 gained 24% in 2021 through July 9th and surpassed the market again by 6.7 percentage points. Unfortunately HAL wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); HAL investors were disappointed as the stock returned 4.5% since the end of March (through 7/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
Follow Halliburton Co (NYSE:HAL)
Follow Halliburton Co (NYSE:HAL)
Suggested Articles:
- How to Best Use Insider Monkey To Increase Your Returns
- 20 Biggest Healthcare Companies By Revenue
- 12 Best Vacation Stocks to Buy Now
Disclosure: None. This article was originally published at Insider Monkey.
