As we already know from media reports and hedge fund investor letters, many hedge funds lost money in the third quarter, blaming macroeconomic conditions and unpredictable events that hit several sectors, with healthcare among them. Nevertheless, most investors decided to stick to their bullish theses and their long-term focus allows us to profit from the recent declines. In particular, let’s take a look at what hedge funds think about Resolute Energy Corp (NYSE:REN) in this article.
Is Resolute Energy Corp a buy right now? Hedge funds are becoming less confident. The number of long hedge fund positions dropped by 6 recently. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as China Techfaith Wireless Comm. Tech. Ltd (NASDAQ:CNTF), Gevo, Inc. (NASDAQ:GEVO), and AEterna Zentaris Inc. (USA) (NASDAQ:AEZS) to gather more data points.
Follow Cimarex Resolute Llc (NYSE:REN)
Follow Cimarex Resolute Llc (NYSE:REN)
To the average investor there are a lot of metrics shareholders employ to grade stocks. A couple of the most innovative metrics are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the top picks of the best investment managers can beat the market by a solid margin (see the details here).
With all of this in mind, we’re going to take a gander at the fresh action encompassing Resolute Energy Corp (NYSE:REN).
What have hedge funds been doing with Resolute Energy Corp (NYSE:REN)?
At Q3’s end, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a slump of 40% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, John H. Scully’s SPO Advisory Corp has the biggest position in Resolute Energy Corp (NYSE:REN), worth close to $6.6 million, corresponding to 0.1% of its total 13F portfolio. On SPO Advisory Corp’s heels is Edward Gilhuly and Scott Stuart of Sageview Capital, with a $2 million position; 0.7% of its 13F portfolio is allocated to the company. Remaining peers with similar optimism consist of Brian Riano, John Eckerson, Sean Fahey and Albert Marino’s Claren Road Asset Management, Michael Murphy and Daniel Donoghue’s Discovery Group and Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners.
Since Resolute Energy Corp (NYSE:REN) has witnessed a declination in interest from the entirety of the hedge funds we track, we can see that there is a sect of funds that decided to sell off their entire stakes by the end of the third quarter. Interestingly, Paul Tudor Jones’s Tudor Investment Corp dropped the largest position of all the hedgies monitored by Insider Monkey, valued at about $0.1 million in stock, and Chao Ku’s Nine Chapters Capital Management made a similar move, as the fund dropped roughly $0.1 million worth of shares. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 6 funds by the end of the third quarter.
Let’s check out hedge fund activity in other stocks similar to Resolute Energy Corp (NYSE:REN). We will take a look at China Techfaith Wireless Comm. Tech. Ltd (NASDAQ:CNTF), Gevo, Inc. (NASDAQ:GEVO), AEterna Zentaris Inc. (USA) (NASDAQ:AEZS), and EnteroMedics Inc (NASDAQ:ETRM). This group of stocks’ market valuations are similar to REN’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CNTF | 4 | 616 | 0 |
| GEVO | 7 | 10893 | 1 |
| AEZS | 4 | 1173 | 2 |
| ETRM | 5 | 809 | -1 |
As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $11 million in REN’s case. Gevo, Inc. (NASDAQ:GEVO) is the most popular stock in this table. On the other hand AEterna Zentaris Inc. (USA) (NASDAQ:AEZS) and China Techfaith Wireless Comm. Tech. Ltd (NASDAQ:CNTF) are the least popular ones with only 4 bullish hedge fund positions each. Compared to these stocks Resolute Energy Corp (NYSE:REN) is more popular among hedge funds, while the amount they invested is substantially north of the average. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
