Is Diamondback Energy Inc (FANG) A Good Stock to Buy?

As one would reasonably expect, key money managers were leading the bulls’ herd. Eton Park Capital created the most outsized position in Diamondback Energy Inc (NASDAQ:FANG). Eton Park Capital had $80.5 million invested in the company at the end of the quarter. Clint Carlson’s Carlson Capital also made a $24 million investment in the stock during the quarter. The following funds were also among the new FANG investors: Charles Clough’s Clough Capital Partners, Ken Griffin’s Citadel Investment Group, and Stuart J. Zimmer’s Zimmer Partners.

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 CPFL Energia S.A. (ADR) (NYSE:CPL), Mallinckrodt PLC (NYSE:MNK), Align Technology, Inc. (NASDAQ:ALGN), and National Retail Properties, Inc. (NYSE:NNN). This group of stocks’ market valuations match FANG’s market valuation.

As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $537 million. That figure was $730 million in FANG’s case. Align Technology, Inc. (NASDAQ:ALGN) is the most popular stock in this table. On the other hand CPFL Energia S.A. (ADR) (NYSE:CPL) is the least popular one with only 5 bullish hedge fund positions. Diamondback Energy Inc (NASDAQ:FANG) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ALGN might be a better candidate to consider taking a long position in.

Disclosure: None