3 Must-Buy Stocks That Hedge Fund Ownership Just Doubled On

Every quarter, a small collection of stocks draws the attention of hedge funds like never before, with hordes of talented money managers all buying into them at the same time. Such a burst of buying activity usually signals that positive catalysts have manifested for the company or its industry and that good times are likely to follow, which is why we closely monitor buying and selling trends among leading hedge funds.

Insider Monkey’s flagship “Best Performing Hedge Funds Strategy” has rewarded subscribers with incredible 107.5% returns since its May 2014 inception, crushing the S&P 500 by over 40 percentage points. The hedge fund strategy’s small number of quarterly picks often span a range of industries. In our May 16 newsletter, customer service platform Zendesk Inc (NYSE:ZEN) and pharmaceutical company FibroGen Inc (NASDAQ:FGEN), each of which gained over 10% during the following 2.5 months, were among the seven stock picks for the quarter.

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Below, we’ll check out three intriguing stocks which saw a doubling of their ownership among the hedge funds tracked by Insider Monkey during Q2.

The Stars Group (NASDAQ:TSG)

Number of Hedge Fund Shareholders of TSG (as of June 30): 60

Value of Hedge Funds’ Holdings in TSG (as of June 30): $1.41 billion

From the end of the first quarter through the end of the second quarter, hedge fund ownership of The Stars Group (NASDAQ:TSG) jumped to 60 from just 26, while the value of hedge funds’ positions nearly doubled as well, to $1.41 billion. New shareholders of The Stars Group included George Soros‘ Soros Fund Management (226,000 shares), Matthew Sidman‘s Three Bays Capital (1.65 million shares), and David Gallo‘s Valinor Management (2.1 million shares).

Hedge funds clearly salivated over the Canadian gaming company’s second quarter acquisition of Sky Betting and Gaming, which came with a price tag of $4.7 billion. The move was a blockbuster when coupled with the Supreme Court’s May decision to legalize sports betting in the United States. On that front, The Stars Group (NASDAQ:TSG) recently launched its proprietary BetStars sports betting platform in New Jersey, becoming the eighth sportsbook in the state. It’s estimated that the U.S sports betting market could grow to as much as $400 billion.

On the next page we’ll look at two other stocks that hedge funds couldn’t get enough of in Q2.

Wildhorse Resource Development Corp (NYSE:WRD)

Number of Hedge Fund Shareholders of WRD (as of June 30): 25

Value of Hedge Funds’ Holdings in WRD (as of June 30): $137 million

Just nine hedge funds found Wildhorse Resource Development Corp (NYSE:WRD) to be worthy of owning at the end of March. By the end of June that number had jumped to 25, while the value of hedge funds’ positions doubled to $137 million. Dmitry Balyasny’s Balyasny Asset Management (771,269 shares), Leon Cooperman‘s Omega Advisors (400,000 shares), and Ken Griffin‘s Citadel Advisors (370,513 shares) were among the many hedge funds to open new WildHorse positions in Q2.

Rising oil prices have made Wildhorse Resource Development Corp (NYSE:WRD) a far more attractive investment, which is likely responsible for the large spike in hedge fund ownership in Q2. The oil and natural gas exploration and production company is a pure-play on the lucrative Eagle Ford basin, where it holds 404,000 net acres with proved reserves of 386 MMboe. WildHorse also has a healthy balance sheet, with $820 million in total liquidity and less than $1 billion in total debt, which has contributed to industry leading debt adjusted production growth since 2017. Wildhorse Resource Development Corp (NYSE:WRD) also tops all peers in Price/NAV at just over 60%.

 

C.H. Robinson Worldwide Inc (NASDAQ:CHRW)

Number of Hedge Fund Shareholders of CHRW (as of June 30): 30

Value of Hedge Funds’ Holdings in CHRW (as of June 30): $412 million

 

Hedge fund ownership of C.H. Robinson Worldwide Inc (NASDAQ:CHRW) doubled to 30 during the second quarter, while the value of the positions owned by the hedge funds tracked by Insider Monkey jumped to $412 million from $230 million. New shareholders included Israel Englander‘s Millennium Management (579,693 shares), Robert Polak‘s Anchor Bolt Capital (231,637 shares), and Clint Carlson‘s Carlson Capital (149,225 shares).

The trucking logistics and brokerage company made a presentation during the 7th Annual Intellisight Conference in August, sharing insights on its future growth potential. C.H. Robinson expects revenue at its Robinson Fresh brand, which distributes fresh produce, to rise by 4% to 8% long-term, while its Global Forwarding revenue is anticipated to post double-digit gains. North American price to customers and cost to carriers have increased for five straight quarters and C.H. Robinson Worldwide Inc (NASDAQ:CHRW) expects the current market fundamentals to remain in place throughout 2018.

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