Is Halliburton Company (NYSE:HAL) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Halliburton Company (NYSE:HAL) shareholders have witnessed an increase in support from the world’s most elite money managers lately. HAL was in 38 hedge funds’ portfolios at the end of the first quarter of 2019. There were 34 hedge funds in our database with HAL holdings at the end of the previous quarter. Our calculations also showed that HAL isn’t among the 30 most popular stocks among hedge funds.
At the moment there are plenty of methods stock market investors employ to size up stocks. Some of the most innovative methods are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the top fund managers can trounce the market by a significant margin (see the details here).
Let’s take a glance at the fresh hedge fund action surrounding Halliburton Company (NYSE:HAL).
What does the smart money think about Halliburton Company (NYSE:HAL)?
Heading into the second quarter of 2019, a total of 38 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 12% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in HAL over the last 15 quarters. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Pzena Investment Management, managed by Richard S. Pzena, holds the biggest position in Halliburton Company (NYSE:HAL). Pzena Investment Management has a $364.1 million position in the stock, comprising 2% of its 13F portfolio. The second most bullish fund manager is Two Sigma Advisors, managed by John Overdeck and David Siegel, which holds a $121 million position; 0.3% of its 13F portfolio is allocated to the stock. Other professional money managers with similar optimism comprise Israel Englander’s Millennium Management, and D. E. Shaw’s D E Shaw.
Consequently, key hedge funds have jumped into Halliburton Company (NYSE:HAL) headfirst. Alyeska Investment Group, managed by Anand Parekh, established the largest position in Halliburton Company (NYSE:HAL). Alyeska Investment Group had $13.4 million invested in the company at the end of the quarter. David Costen Haley’s HBK Investments also made a $11.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Paul Marshall and Ian Wace’s Marshall Wace LLP, Steve Pattyn’s Yaupon Capital, and Sara Nainzadeh’s Centenus Global Management.
Let’s also examine hedge fund activity in other stocks similar to Halliburton Company (NYSE:HAL). We will take a look at Agilent Technologies Inc. (NYSE:A), AutoZone, Inc. (NYSE:AZO), Tyson Foods, Inc. (NYSE:TSN), and Twitter Inc (NYSE:TWTR). This group of stocks’ market values are similar to HAL’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| A | 41 | 2099188 | 1 |
| AZO | 42 | 1209112 | 2 |
| TSN | 43 | 1534989 | 5 |
| TWTR | 46 | 1363199 | -3 |
| Average | 43 | 1551622 | 1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 43 hedge funds with bullish positions and the average amount invested in these stocks was $1552 million. That figure was $855 million in HAL’s case. Twitter Inc (NYSE:TWTR) is the most popular stock in this table. On the other hand Agilent Technologies Inc. (NYSE:A) is the least popular one with only 41 bullish hedge fund positions. Compared to these stocks Halliburton Company (NYSE:HAL) is even less popular than A. Hedge funds dodged a bullet by taking a bearish stance towards HAL. Our calculations showed that the top 15 most popular hedge fund stocks returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately HAL wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); HAL investors were disappointed as the stock returned -24.3% during the same time frame and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in the second quarter.
Disclosure: None. This article was originally published at Insider Monkey.
