Do Hedge Funds Love PDC Energy Inc (PDCE)?

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards PDC Energy Inc (NASDAQ:PDCE).

Is PDC Energy Inc (NASDAQ:PDCE) going to take off soon? Investors who are in the know were taking an optimistic view. The number of long hedge fund bets improved by 3 in recent months. PDC Energy Inc (NASDAQ:PDCE) was in 24 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 32. Our calculations also showed that PDCE isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 21 hedge funds in our database with PDCE positions at the end of the fourth quarter.

In the 21st century investor’s toolkit there are several gauges investors put to use to evaluate stocks. A couple of the best gauges are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the top picks of the best fund managers can outpace their index-focused peers by a solid amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Michael Gelband of ExodusPoint Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a peek at the recent hedge fund action regarding PDC Energy Inc (NASDAQ:PDCE).

Do Hedge Funds Think PDCE Is A Good Stock To Buy Now?

At Q1’s end, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 14% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards PDCE over the last 23 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in PDC Energy Inc (NASDAQ:PDCE) was held by Marshall Wace LLP, which reported holding $68.5 million worth of stock at the end of December. It was followed by Fisher Asset Management with a $55.1 million position. Other investors bullish on the company included SailingStone Capital Partners, Maple Rock Capital, and SIR Capital Management. In terms of the portfolio weights assigned to each position SailingStone Capital Partners allocated the biggest weight to PDC Energy Inc (NASDAQ:PDCE), around 11.63% of its 13F portfolio. SIR Capital Management is also relatively very bullish on the stock, dishing out 4.11 percent of its 13F equity portfolio to PDCE.

As one would reasonably expect, some big names have been driving this bullishness. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the biggest position in PDC Energy Inc (NASDAQ:PDCE). Marshall Wace LLP had $68.5 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $4.2 million position during the quarter. The other funds with brand new PDCE positions are Matthew Hulsizer’s PEAK6 Capital Management, Bruce Kovner’s Caxton Associates LP, and Paul Tudor Jones’s Tudor Investment Corp.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as PDC Energy Inc (NASDAQ:PDCE) but similarly valued. These stocks are ABM Industries, Inc. (NYSE:ABM), Copa Holdings, S.A. (NYSE:CPA), 3D Systems Corporation (NYSE:DDD), Visteon Corp (NASDAQ:VC), Instil Bio, Inc. (NASDAQ:TIL), BancorpSouth Bank (NYSE:BXS), and Utz Brands Inc (NYSE:UTZ). This group of stocks’ market values match PDCE’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ABM 17 40361 -3
CPA 18 213264 -3
DDD 16 315553 1
VC 20 196777 -3
TIL 21 778526 21
BXS 12 66932 -3
UTZ 13 110348 -2
Average 16.7 245966 1.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 16.7 hedge funds with bullish positions and the average amount invested in these stocks was $246 million. That figure was $293 million in PDCE’s case. Instil Bio, Inc. (NASDAQ:TIL) is the most popular stock in this table. On the other hand BancorpSouth Bank (NYSE:BXS) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks PDC Energy Inc (NASDAQ:PDCE) is more popular among hedge funds. Our overall hedge fund sentiment score for PDCE is 80.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and still managed to beat the market by 7.7 percentage points. Hedge funds were also right about betting on PDCE, though not to the same extent, as the stock returned 13.8% since the end of March (through July 16th) and outperformed the market as well.

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