With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter of 2021. One of these stocks was Magnolia Oil & Gas Corporation (NYSE:MGY).
Is Magnolia Oil & Gas Corporation (NYSE:MGY) going to take off soon? The best stock pickers were in a bullish mood. The number of long hedge fund positions rose by 9 lately. Magnolia Oil & Gas Corporation (NYSE:MGY) was in 28 hedge funds’ portfolios at the end of September. The all time high for this statistic is 37. Our calculations also showed that MGY isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 19 hedge funds in our database with MGY holdings at the end of June.
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 take a look at the latest hedge fund action encompassing Magnolia Oil & Gas Corporation (NYSE:MGY).
Jeffrey Talpins of Element Capital
Do Hedge Funds Think MGY Is A Good Stock To Buy Now?
At the end of September, a total of 28 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 47% from one quarter earlier. On the other hand, there were a total of 19 hedge funds with a bullish position in MGY a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
More specifically, Two Sigma Advisors was the largest shareholder of Magnolia Oil & Gas Corporation (NYSE:MGY), with a stake worth $41.7 million reported as of the end of September. Trailing Two Sigma Advisors was Driehaus Capital, which amassed a stake valued at $18.7 million. D E Shaw, Millennium Management, and SIR Capital Management 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 Elm Ridge Capital allocated the biggest weight to Magnolia Oil & Gas Corporation (NYSE:MGY), around 6.24% of its 13F portfolio. SIR Capital Management is also relatively very bullish on the stock, dishing out 1.11 percent of its 13F equity portfolio to MGY.
As one would reasonably expect, specific money managers were breaking ground themselves. Point72 Asset Management, managed by Steve Cohen, assembled the largest position in Magnolia Oil & Gas Corporation (NYSE:MGY). Point72 Asset Management had $4.4 million invested in the company at the end of the quarter. Sander Gerber’s Hudson Bay Capital Management also made a $4.3 million investment in the stock during the quarter. The following funds were also among the new MGY investors: Jeffrey Talpins’s Element Capital Management, Steve Pattyn’s Yaupon Capital, and Benjamin A. Smith’s Laurion Capital Management.
Let’s check out hedge fund activity in other stocks similar to Magnolia Oil & Gas Corporation (NYSE:MGY). We will take a look at LivePerson, Inc. (NASDAQ:LPSN), CI Financial Corp (NYSE:CIXX), Hancock Whitney Corporation (NASDAQ:HWC), ReNew Energy Global plc (NASDAQ:RNW), Diodes Incorporated (NASDAQ:DIOD), Univar Solutions Inc (NYSE:UNVR), and Sonos, Inc. (NASDAQ:SONO). This group of stocks’ market valuations are closest to MGY’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LPSN | 26 | 225697 | -1 |
| CIXX | 13 | 186295 | 4 |
| HWC | 23 | 147472 | 1 |
| RNW | 24 | 286911 | 24 |
| DIOD | 19 | 116182 | 1 |
| UNVR | 29 | 676496 | 1 |
| SONO | 49 | 647491 | 2 |
| Average | 26.1 | 326649 | 4.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.1 hedge funds with bullish positions and the average amount invested in these stocks was $327 million. That figure was $144 million in MGY’s case. Sonos, Inc. (NASDAQ:SONO) is the most popular stock in this table. On the other hand CI Financial Corp (NYSE:CIXX) is the least popular one with only 13 bullish hedge fund positions. Magnolia Oil & Gas Corporation (NYSE:MGY) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MGY is 53.5. 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. Hedge funds were also right about betting on MGY as the stock returned 14.2% since the end of Q3 (through 12/9) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Magnolia Oil & Gas Corp (NYSE:MGY)
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Disclosure: None. This article was originally published at Insider Monkey.
