Academic research on hedge funds have shown that the stocks bought by hedge funds outperform the market on average. In this article we will focus on 5 stocks that hedge funds bought last week: two stocks across the oil, petroleum and natural gas sectors and three healthcare stocks.
PBF Energy Inc (NYSE:PBF) the petroleum refinery-based fuel, oil and petroleum products maker has lately attracted hedge fund investments, despite a not-so-good third quarter. Revenues were reported to have dropped from $5.4 billion, in the third quarter of 2012 to $4.9 billion this year. The potential for this company lies in its varied fuels and petroleum product range, buoyed by the three refineries which the company currently operates.
Tiger-cub’ John Griffin’s, Blue Ridge Capital, has already made a good foray into PBF Energy Inc (NYSE:PBF) stock, with a current overall holding of 7.8% of the stock’s outstanding shares. The position held by Blue Ridge is passive by nature and amasses 3.1 million shares of the company.
PBF Energy Inc (NYSE:PBF) could also be found in the equity portfolios of some other funds such as: Robert Joseph Caruso’s Select Equity Group, which owns a position that amasses 5.4 million shares, valued at $122.3 million. The stake held by Select Equity is the largest among the hedge funds we track. Clint Carlson’s Carlson Capital ownership is 1 million shares, valued at $23.1million.
WPX Energy Inc (NYSE:WPX), a natural gas and oil exploration company, has been a stock that had top-line hedge funds investing in it. These include John A. Levin’s Levin Capital Strategies holding 3.8 million shares; Zac Hirzel’s Hirzel Capital Management holding position of 2.5 million shares and Frank Brosens’ Taconic Capital Advisors holding 13.8 million shares.
WPX Energy Inc (NYSE:WPX) along with other oil exploration companies, with operations off the Niobrara Shale, is likely to be affected by the recent five-year ban on ‘fracking’ for natural gas in the Colorado, Broomfield region.
Additionally, WPX Energy Inc (NYSE:WPX) is undergoing some reshuffling on the management level as well, with CEO Ralph Hill stepping down along with Taconic Capital hedge fund now holding a sufficiently large position to nominate its representatives on WPX Energy Inc (NYSE:WPX)’s board.
Tenet Healthcare Corp
Tenet Healthcare Corp (NYSE:THC), is a much loved healthcare stock and has attracted Larry Robbins’ Glenview Capital hedge fund. Knowing Glenview Capital predominantly invests in healthcare, technology and services sectors, the increase in its position in Tenet Healthcare Corp (NYSE:THC) recently is definitely exciting!
The hedge fund increased its holding an additional 1 million shares, raising the overall total of shares it holds to 12.9 million shares.
Healthways, Inc. (NASDAQ:HWAY) is a services company in the wellness industry solutions, with special focus on preventive healthcare and lifestyle management through programs, such as those offered by Dean Ornish, M.D.
A flat third quarter for Healthways, Inc. (NASDAQ:HWAY) did not deter hedge funds Israel Englander’s Millennium Management (holding 6.8 million shares), followed by SAC Capital’s subsidiary CR Intrinsic Investors (owning 6.5 million shares).
The most recent hedge fund activist on Healthways, Inc. (NASDAQ:HWAY) has been Conan Laughlin’s North Tide Capital, which raised his total amount of shares to 3.85 million, from 3.40 million held earlier.
Derma Sciences Inc. (NASDAQ:DSCI), is not the run of the mill healthcare stock but a specialty company focused on wound care. The recent increase in net sales for Derma Sciences has perhaps led to the likes of hedge funds- Julian Baker and Felix Baker’s Baker Bros. Advisors increasing position to 2.6 million shares. Peter Kolchinsky’s RA Capital Management has now boosted its position to 2 million shares, while Stephen Dubois’ Camber Capital Management has now increased the shares it holds to 950 thousand shares.