Wednesday has been a good day for many investors, as the Dow Jones is up by 78 points and the S&P is up by almost 6 points. Both the Dow and the S&P 500 are above key technical levels, with the Dow above 18,000 and the S&P above 2,100. Among the stocks well in the green today are Teck Resources Ltd (USA) (NYSE:TCK), Bonanza Creek Energy Inc (NYSE:BCEI), Helix Energy Solutions Group Inc (NYSE:HLX), Cloud Peak Energy Inc. (NYSE:CLD), and MaxLinear, Inc. (NYSE:MXL). Let’s take a closer look at why and see how hedge funds are positioned in each stock.
Through extensive research that covered the portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see the details here).
Teck, Bonanza, and Helix Surge on Higher Crude Prices
Teck Resources Ltd (USA) (NYSE:TCK), Bonanza Creek Energy Inc (NYSE:BCEI), and Helix Energy Solutions Group Inc (NYSE:HLX) have each surged today due to rising crude prices. Today’s EIA numbers showed a 2.1 million-barrel increase in crude inventories last week, better than both the API’s estimate of 3.1 million barrels of inventory and analysts’ expectations of 2.4 million barrels. The EIA numbers also showed a 3.6 million-barrel drop in distillates versus the expected 0.3 million-barrel increase. The bullish numbers were enough to send energy prices higher despite the oil workers strike in Kuwait ending. Near month WTI futures rose more than $2 per barrel to $43.88 at the time of writing, while Brent futures have pierced through the $45 per barrel mark.
Although it isn’t a major oil producer, Teck Resources Ltd (USA) (NYSE:TCK) owns 20% of the billion-dollar Fort Hills oil sands project, which becomes more cost competitive the higher crude prices go. 15 elite funds that Insider Monkey tracks in its database owned 1.6% of the company’s float at the end of December. Shares of Teck are 9.6% higher on the day.
Given that Bonanza Creek Energy is an independent energy E&P, the company benefits when WTI goes higher. That fact isn’t lost on traders, who have bid the stock up by over 19% on Wednesday. A short squeeze could also be playing a part, as almost one-third of Bonanza Creek Energy Inc (NYSE:BCEI)’s float is short. Jim Simons‘ Renaissance Technologies was among the major shareholders of Bonanza, with a stake of over 1.00 million shares at the end of the fourth quarter.
In addition to the higher crude prices, Helix Energy Solutions Group Inc (NYSE:HLX) shares are up 9% today after reporting better-than-expected first quarter earnings. For the January 1-to-March 31 period, Helix lost $0.26 per share, which beat estimates of a loss of $0.28 per share. Revenue for Helix missed expectations by $14.19 million, however. CEO Owen Kratz commented on the results in a press release:
“We expected the first quarter to be the low quarter in 2016 due to continuing weak industry conditions combined with typical seasonal factors. Going forward, we expect to see improved financial performance for the remaining quarters due to the commencement of the Q5000 contract and the normal seasonal pick up in well intervention activity in the North Sea.”
Cliff Asness’ AQR Capital Management owned 438,552 Helix shares at the end of 2015.
On the next page we examine why Cloud Peak Energy and MaxLinear are also making big moves upward today.