Halliburton Company (HAL): Hedge Funds In Wait-and-See Mode

We at Insider Monkey have gone over 867 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 September 30th. In this article, we look at what those funds think of Halliburton Company (NYSE:HAL) based on that data.

Halliburton Company (NYSE:HAL) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 29 hedge funds’ portfolios at the end of September. Our calculations also showed that HAL isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). 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 M&T Bank Corporation (NYSE:MTB), Asana Inc. (NYSE:ASAN), and PG&E Corporation (NYSE:PCG) to gather more data points.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. With all of this in mind let’s analyze the new hedge fund action surrounding Halliburton Company (NYSE:HAL).

FISHER ASSET MANAGEMENT

Ken Fisher of Fisher Asset Management

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

At the end of the third quarter, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in HAL over the last 25 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Pzena Investment Management was the largest shareholder of Halliburton Company (NYSE:HAL), with a stake worth $843.5 million reported as of the end of September. Trailing Pzena Investment Management was Fisher Asset Management, which amassed a stake valued at $95.4 million. Holocene Advisors, Millennium Management, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Covalent Capital Partners allocated the biggest weight to Halliburton Company (NYSE:HAL), around 5.22% of its 13F portfolio. Pzena Investment Management is also relatively very bullish on the stock, setting aside 3.34 percent of its 13F equity portfolio to HAL.

Due to the fact that Halliburton Company (NYSE:HAL) has witnessed a decline in interest from the aggregate hedge fund industry, logic holds that there exists a select few funds that elected to cut their positions entirely by the end of the third quarter. At the top of the heap, Ken Heebner’s Capital Growth Management said goodbye to the biggest stake of all the hedgies tracked by Insider Monkey, valued at about $30.1 million in stock, and Clint Carlson’s Carlson Capital was right behind this move, as the fund said goodbye to about $4.2 million worth. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now take a look at hedge fund activity in other stocks similar to Halliburton Company (NYSE:HAL). We will take a look at M&T Bank Corporation (NYSE:MTB), Asana Inc. (NYSE:ASAN), PG&E Corporation (NYSE:PCG), Bio-Techne Corporation (NASDAQ:TECH), Raymond James Financial, Inc. (NYSE:RJF), Burlington Stores Inc (NYSE:BURL), and Restaurant Brands International Inc (NYSE:QSR). This group of stocks’ market valuations are similar to HAL’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MTB 27 774232 -19
ASAN 33 1053115 11
PCG 54 3825487 -10
TECH 33 432450 8
RJF 32 767984 3
BURL 45 1835947 2
QSR 22 1873877 0
Average 35.1 1509013 -0.7

View table here if you experience formatting issues.

As you can see these stocks had an average of 35.1 hedge funds with bullish positions and the average amount invested in these stocks was $1509 million. That figure was $1248 million in HAL’s case. PG&E Corporation (NYSE:PCG) is the most popular stock in this table. On the other hand Restaurant Brands International Inc (NYSE:QSR) is the least popular one with only 22 bullish hedge fund positions. Halliburton Company (NYSE:HAL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for HAL is 30. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 28.6% in 2021 through November 30th and surpassed the market again by 5.6 percentage points. Unfortunately HAL wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); HAL investors were disappointed as the stock returned -0.1% since the end of September (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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