Range Resources Corp. (NYSE:RRC) reported a loss of $119 million for the second quarter yesterday, representing a loss of $0.71 per share. For the same quarter last year, the company posted a profit of $171 million, or $1.04 per share. Although the oil and gas company did well to cut down on costs, the low oil and gas prices that have beset the industry of late couldn’t spare it, leading to the less-than-impressive second quarter results. The company posted revenue of $247.50 million, widely missing the Zacks Consensus Estimate of $395 million. This also represented a 68% drop on a year-over-year basis. The company’s production for the quarter hit a record high of 1,372.6 million cubic feet equivalent per day (MMcfe/d) on average, with natural gas accounting for 70% of the total production. On a year-over-year basis, natural gas liquids production was up by 14%, oil production was up by 10%, and oil and gas production was up by 29%. The company’s long-term debt stood at $3.46 billion, representing a debt-to-capitalization ratio of 50.6%. The $7.63 billion company has reiterated its fiscal year 2015 guidance of s 20% year-over-year growth in production. Shares dropped by 2.98% in trading on Wednesday.
At the end of the first quarter, a total of 39 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of five from the previous quarter. The hedge funds that were long in the stock held an aggregate investment of $1.28 billion, up from the aggregate of $978.46 million held at the end of the fourth quarter of 2014, despite the stock trading down by over 2% during the period, so the smart money was bullish on the stock during the quarter. And while it did experience strong growth in the first half of the second quarter, it’s been a long downhill slide from there. However, as hedge funds may have timed their exit in the second quarter on the rise, we can’t proclaim they were wrong to invest further in the company in the first quarter.
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Insider Monkey is also keen on insider activities pertaining to stocks. Over the past three months, the company experienced a lot of insider trading, posting 25 open market buys and 15 sales, involving 278,189 shares and 182,541 shares respectively. As insider purchases are a much stronger indicator than sales, we can say that the quantity of purchases is rather bullish behavior by insiders.
Now, let’s take a look at the latest hedge fund action regarding Range Resources Corp. (NYSE:RRC).
Hedge fund activity in Range Resources Corp. (NYSE:RRC)
When looking at the hedgies followed by Insider Monkey, SPO Advisory Corp, managed by John H. Scully, holds the most valuable position in Range Resources Corp. (NYSE:RRC). SPO Advisory Corp has a $280.6 million position in the stock, comprising 3.9% of its 13F portfolio. The second-largest stake is held by Pennant Capital Management, led by Alan Fournier, holding a $123.4 million position; 2.3% of its 13F portfolio is allocated to the company. Some other hedge funds that are bullish contain Ross Margolies’ Stelliam Investment Management, Wallace Weitz’s Wallace R. Weitz & Co., and Zac Hirzel’s Hirzel Capital Management. In fact, a keen look at the activities of the hedge funds invested in the stock at the end of the quarter shows very bullish sentiment, with the top ten holders all having either increased their positions or creating new ones.
With a general bullishness amongst the heavyweights, some big names have jumped into Range Resources Corp. (NYSE:RRC) headfirst. Hirzel Capital Management established the largest position in Range Resources Corp. (NYSE:RRC). Hirzel Capital Management had $81.2 million invested in the company at the end of the quarter. William C. Martin’s Raging Capital Management also made a $66.5 million investment in the stock during the quarter. The other funds with brand new RRC positions are Will Snellings’ Marianas Fund Management, Jim Simons’ Renaissance Technologies, and Jorge Paulo Lemann‘s 3G Capital.
A quick look at the company’s second quarter earnings results, insider activity, and hedge fund sentiment shows that the stock is a good investment, though it is still facing challenges that have widely affected the industry in general. With the company focused on instilling efficiency and implementing cost cutting measures, it’s likely to perform better in the third quarter of 2015.
Disclosure: None
