Hedge Fund Sentiment Is Stagnant On Ecopetrol S.A. (ADR) (EC)

We view hedge fund activity in the stock as unfavorable, but in this case there was only a single hedge fund selling its entire position: Arrowstreet Capital. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Electron Capital Partners).

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Ecopetrol S.A. (ADR) (NYSE:EC) but similarly valued. We will take a look at Deutsche Bank AG (USA) (NYSE:DB), Sasol Limited (ADR) (NYSE:SSL), Molson Coors Brewing Company (NYSE:TAP), and POSCO (ADR) (NYSE:PKX). All of these stocks’ market caps match EC’s market cap.

As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $909 million. That figure was just $58 million in EC’s case. Molson Coors Brewing Company (NYSE:TAP) is the most popular stock in this table. On the other hand Sasol Limited (ADR) (NYSE:SSL) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Ecopetrol S.A. (ADR) (NYSE:EC) is even less popular than SSL. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock.

Disclosure: None