Did Hedge Funds Make The Right Call On Par Pacific Holdings, Inc. (PARR)?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. We are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article we look at how hedge funds traded Par Pacific Holdings, Inc. (NYSE:PARR) and determine whether the smart money was really smart about this stock.

Hedge fund interest in Par Pacific Holdings, Inc. (NYSE:PARR) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare PARR to other stocks including Independence Holding Company (NYSE:IHC), Hawkins, Inc. (NASDAQ:HWKN), and Switchback Energy Acquisition Corporation (NYSE:SBE) to get a better sense of its popularity.

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Andy Redleaf Andrew Redleaf Whitebox Advisors

Andy Redleaf of Whitebox Advisors

At Insider Monkey we scour multiple sources to uncover the next great investment idea. Cannabis stocks are roaring back in 2020, so we are checking out this under-the-radar stock. We go through lists like the 10 most profitable companies in America to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. Keeping this in mind let’s go over the fresh hedge fund action surrounding Par Pacific Holdings, Inc. (NYSE:PARR).

What have hedge funds been doing with Par Pacific Holdings, Inc. (NYSE:PARR)?

At Q1’s end, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards PARR over the last 18 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Par Pacific Holdings, Inc. (NYSE:PARR) was held by Renaissance Technologies, which reported holding $18.3 million worth of stock at the end of September. It was followed by Park West Asset Management with a $14.5 million position. Other investors bullish on the company included Birch Run Capital, Whitebox Advisors, and Marshall Wace LLP. In terms of the portfolio weights assigned to each position Birch Run Capital allocated the biggest weight to Par Pacific Holdings, Inc. (NYSE:PARR), around 5.4% of its 13F portfolio. Yaupon Capital is also relatively very bullish on the stock, designating 1.42 percent of its 13F equity portfolio to PARR.

Due to the fact that Par Pacific Holdings, Inc. (NYSE:PARR) has experienced declining sentiment from hedge fund managers, we can see that there was a specific group of hedge funds that slashed their full holdings heading into Q4. It’s worth mentioning that Israel Englander’s Millennium Management cut the largest investment of all the hedgies watched by Insider Monkey, totaling about $9.7 million in stock. Leon Cooperman’s fund, Omega Advisors, also said goodbye to its stock, about $2.3 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s check out hedge fund activity in other stocks similar to Par Pacific Holdings, Inc. (NYSE:PARR). These stocks are Independence Holding Company (NYSE:IHC), Hawkins, Inc. (NASDAQ:HWKN), Switchback Energy Acquisition Corporation (NYSE:SBE), and Yiren Digital Ltd. (NYSE:YRD). This group of stocks’ market caps are similar to PARR’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
IHC 2 13618 -3
HWKN 5 8259 -3
SBE 15 95680 -1
YRD 2 2472 -3
Average 6 30007 -2.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $30 million. That figure was $49 million in PARR’s case. Switchback Energy Acquisition Corporation (NYSE:SBE) is the most popular stock in this table. On the other hand Independence Holding Company (NYSE:IHC) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Par Pacific Holdings, Inc. (NYSE:PARR) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 18.6% in 2020 through July 27th and still beat the market by 17.1 percentage points. Unfortunately PARR wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on PARR were disappointed as the stock returned 18.3% since the end of the first quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

Follow Par Pacific Holdings Inc. (NYSEMKT:PARR)

Disclosure: None. This article was originally published at Insider Monkey.