You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make a proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
Is Phillips 66 (NYSE:PSX) a bargain? Money managers are selling. The number of long hedge fund bets shrunk by 2 in recent months. 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 Shire PLC (ADR) (NASDAQ:SHPG), Adobe Systems Incorporated (NASDAQ:ADBE), and FedEx Corporation (NYSE:FDX) to gather more data points.
To most stock holders, hedge funds are viewed as unimportant, old financial vehicles of yesteryear. While there are greater than 8000 funds in operation at present, our experts hone in on the bigwigs of this group, approximately 700 funds. It is estimated that this group of investors directs the majority of all hedge funds’ total asset base, and by watching their matchless equity investments, Insider Monkey has come up with many investment strategies that have historically defeated Mr. Market. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points annually for a decade in their back tests.
Now, let’s review the recent action surrounding Phillips 66 (NYSE:PSX).
How are hedge funds trading Phillips 66 (NYSE:PSX)?
At the end of September, a total of 33 of the hedge funds tracked by Insider Monkey were long this stock, a decline of 6% from the previous quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Berkshire Hathaway holds the biggest position in Phillips 66 (NYSE:PSX). Berkshire Hathaway has a $4.72 billion position in the stock, comprising 3.7% of its 13F portfolio. The second most bullish fund manager is D E Shaw, holding a $763.5 million position; the fund has 1.1% of its 13F portfolio invested in the stock. Remaining members of the smart money that are bullish encompass David Cohen and Harold Levy’s Iridian Asset Management, Steven Richman’s East Side Capital (RR Partners), and Cliff Asness’ AQR Capital Management.