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Hedge Funds Are Selling YPF Sociedad Anonima (YPF)

We at Insider Monkey have gone over 700 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 YPF Sociedad Anonima (NYSE:YPF) based on that data.

YPF Sociedad Anonima (NYSE:YPF) shareholders have witnessed a decrease in hedge fund sentiment in recent months. YPF was in 17 hedge funds’ portfolios at the end of September. There were 24 hedge funds in our database with YPF holdings at the end of the previous quarter. Our calculations also showed that YPF isn’t among the 30 most popular stocks among hedge funds.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

BAUPOST GROUP Seth Klarman

Let’s review the recent hedge fund action encompassing YPF Sociedad Anonima (NYSE:YPF).

What does the smart money think about YPF Sociedad Anonima (NYSE:YPF)?

At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -29% from the second quarter of 2018. The graph below displays the number of hedge funds with bullish position in YPF over the last 13 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

YPF_dec2018

More specifically, Baupost Group was the largest shareholder of YPF Sociedad Anonima (NYSE:YPF), with a stake worth $92.7 million reported as of the end of September. Trailing Baupost Group was FinePoint Capital, which amassed a stake valued at $65.9 million. Knighthead Capital, Redwood Capital Management, and PEAK6 Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.

Judging by the fact that YPF Sociedad Anonima (NYSE:YPF) has witnessed a decline in interest from the smart money, it’s easy to see that there is a sect of funds that elected to cut their positions entirely by the end of the third quarter. It’s worth mentioning that Steve Cohen’s Point72 Asset Management sold off the biggest investment of all the hedgies tracked by Insider Monkey, worth close to $19.4 million in call options. Ed Bosek’s fund, BeaconLight Capital, also said goodbye to its call options, about $15.2 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 7 funds by the end of the third quarter.

Let’s now review hedge fund activity in other stocks similar to YPF Sociedad Anonima (NYSE:YPF). We will take a look at Integrated Device Technology, Inc. (NASDAQ:IDTI), JetBlue Airways Corporation (NASDAQ:JBLU), New Residential Investment Corp (NYSE:NRZ), and USG Corporation (NYSE:USG). This group of stocks’ market caps are similar to YPF’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
IDTI 35 838486 19
JBLU 30 560163 3
NRZ 16 115070 -3
USG 21 2111110 0
Average 25.5 906207 4.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 25.5 hedge funds with bullish positions and the average amount invested in these stocks was $906 million. That figure was $242 million in YPF’s case. Integrated Device Technology, Inc. (NASDAQ:IDTI) is the most popular stock in this table. On the other hand New Residential Investment Corp (NYSE:NRZ) is the least popular one with only 16 bullish hedge fund positions. YPF Sociedad Anonima (NYSE:YPF) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard IDTI might be a better candidate to consider a long position.

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

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