It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. The S&P 500 Index gained 5.2% in the 12 month-period that ended October 30, while less than 49% of its stocks beat the benchmark. In contrast, the 30 most popular S&P 500 stocks among the hedge fund investors tracked by the Insider Monkey team returned 9.5% over the same period, which provides evidence that these money managers do have great stock picking abilities. Even more to that, 63% of these stocks managed to beat the S&P 500 Index. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Apache Corporation (NYSE:APA).
Is Apache Corporation a cheap investment today? The best stock pickers are betting on the stock. The number of bullish hedge fund bets advanced by 13 recently. APA was in 45 hedge funds’ portfolios at the end of the third quarter of 2015. There were 32 hedge funds in our database with APA positions at the end of the previous quarter. 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 Essex Property Trust Inc (NYSE:ESS), Palo Alto Networks Inc (NYSE:PANW), and Check Point Software Technologies Ltd. (NASDAQ:CHKP) to gather more data points.
Follow Apache Corp (NYSE:APA)
Follow Apache Corp (NYSE:APA)
At the moment there are numerous tools shareholders employ to value publicly traded companies. A couple of the most innovative tools are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the best picks of the elite fund managers can trounce the market by a significant margin (see the details here).
Keeping this in mind, we’re going to view the fresh action encompassing Apache Corporation (NYSE:APA).
How are hedge funds trading Apache Corporation (NYSE:APA)?
At the end of the third quarter, a total of 45 of the hedge funds tracked by Insider Monkey held long positions in this stock, a surge of 41% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, William B. Gray’s Orbis Investment Management has the number one position in Apache Corporation (NYSE:APA), worth close to $526.6 million, comprising 4.5% of its total 13F portfolio. Coming in second is Citadel Investment Group, led by Ken Griffin, holding a $144.3 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions encompass Bill Miller’s Legg Mason Capital Management, Richard S. Pzena’s Pzena Investment Management and Sandy Nairn’s Edinburgh Partners.
Now, key money managers have jumped into Apache Corporation (NYSE:APA) headfirst. Edinburgh Partners, managed by Sandy Nairn, initiated the most valuable position in Apache Corporation (NYSE:APA). The fund reportedly had $70.6 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $65 million investment in the stock during the quarter. The following funds were also among the new APA investors: Jim Simons’s Renaissance Technologies, Dmitry Balyasny’s Balyasny Asset Management, and Paul Reeder and Edward Shapiro’s PAR Capital Management.
Let’s check out hedge fund activity in other stocks similar to Apache Corporation (NYSE:APA). We will take a look at Essex Property Trust Inc (NYSE:ESS), Palo Alto Networks Inc (NYSE:PANW), Check Point Software Technologies Ltd. (NASDAQ:CHKP), and National-Oilwell Varco, Inc. (NYSE:NOV). This group of stocks’ market valuations match APA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ESS | 22 | 289265 | -2 |
| PANW | 47 | 914989 | 2 |
| CHKP | 32 | 1424206 | -10 |
| NOV | 28 | 1346280 | 0 |
As you can see these stocks had an average of 32 hedge funds with bullish positions and the average amount invested in these stocks was $994 million. That figure was $1.33 billion in APA’s case. Palo Alto Networks Inc (NYSE:PANW) is the most popular stock in this table, while Essex Property Trust Inc (NYSE:ESS) is the least popular one with only 22 bullish hedge fund positions. Apache Corporation (NYSE:APA) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard PANW might be a better candidate to consider a long position.
