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Do Hedge Funds Love Cabot Oil & Gas Corporation (COG)?

We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of Cabot Oil & Gas Corporation (NYSE:COG) based on that data.

Cabot Oil & Gas Corporation (NYSE:COG) was in 37 hedge funds’ portfolios at the end of March. COG shareholders have witnessed an increase in activity from the world’s largest hedge funds recently. There were 34 hedge funds in our database with COG positions at the end of the previous quarter. Our calculations also showed that COG isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

Today there are a large number of signals investors have at their disposal to appraise stocks. Some of the less utilized signals are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the top picks of the elite fund managers can beat their index-focused peers by a significant margin (see the details here).

Paul Marshall Marshall Wace

Paul Marshall of Marshall Wace

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a look at the key hedge fund action regarding Cabot Oil & Gas Corporation (NYSE:COG).

How have hedgies been trading Cabot Oil & Gas Corporation (NYSE:COG)?

At Q1’s end, a total of 37 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 9% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards COG over the last 18 quarters. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Citadel Investment Group, managed by Ken Griffin, holds the most valuable position in Cabot Oil & Gas Corporation (NYSE:COG). Citadel Investment Group has a $135.1 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Point72 Asset Management, led by Steve Cohen, holding a $53.1 million position; 0.4% of its 13F portfolio is allocated to the stock. Some other peers that are bullish comprise John Overdeck and David Siegel’s Two Sigma Advisors, D. E. Shaw’s D E Shaw and Paul Marshall and Ian Wace’s Marshall Wace LLP. In terms of the portfolio weights assigned to each position Deep Basin Capital allocated the biggest weight to Cabot Oil & Gas Corporation (NYSE:COG), around 5% of its 13F portfolio. SIR Capital Management is also relatively very bullish on the stock, dishing out 4.98 percent of its 13F equity portfolio to COG.

As one would reasonably expect, key money managers were leading the bulls’ herd. Citadel Investment Group, managed by Ken Griffin, initiated the most valuable position in Cabot Oil & Gas Corporation (NYSE:COG). Citadel Investment Group had $135.1 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also initiated a $53.1 million position during the quarter. The following funds were also among the new COG investors: Paul Marshall and Ian Wace’s Marshall Wace LLP, Todd J. Kantor’s Encompass Capital Advisors, and Till Bechtolsheimer’s Arosa Capital Management.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Cabot Oil & Gas Corporation (NYSE:COG) but similarly valued. These stocks are Iron Mountain Incorporated (NYSE:IRM), NRG Energy Inc (NYSE:NRG), Americold Realty Trust (NYSE:COLD), and Mobile TeleSystems Public Joint Stock Company (NYSE:MBT). All of these stocks’ market caps resemble COG’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
IRM 19 49061 2
NRG 38 859890 -4
COLD 25 275635 -1
MBT 9 377645 -4
Average 22.75 390558 -1.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 22.75 hedge funds with bullish positions and the average amount invested in these stocks was $391 million. That figure was $469 million in COG’s case. NRG Energy Inc (NYSE:NRG) is the most popular stock in this table. On the other hand Mobile TeleSystems Public Joint Stock Company (NYSE:MBT) is the least popular one with only 9 bullish hedge fund positions. Cabot Oil & Gas Corporation (NYSE:COG) 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. 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 8.3% in 2020 through the end of May but beat the market by 13.2 percentage points. Unfortunately COG wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on COG were disappointed as the stock returned 16% during the same time period 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 many of these stocks already outperformed the market so far this year.

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