Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Here’s What Hedge Funds Think About Jagged Peak Energy Inc. (JAG)

At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Tiger Global because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.

Is Jagged Peak Energy Inc. (NYSE:JAG) the right investment to pursue these days? Money managers are reducing their bets on the stock. The number of long hedge fund bets went down by 5 recently. Our calculations also showed that jag isn’t among the 30 most popular stocks among hedge funds.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Phill Gross, Adage Capital Management

Let’s take a look at the key hedge fund action encompassing Jagged Peak Energy Inc. (NYSE:JAG).

What does the smart money think about Jagged Peak Energy Inc. (NYSE:JAG)?

At Q4’s end, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of -33% from the second quarter of 2018. The graph below displays the number of hedge funds with bullish position in JAG over the last 14 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with JAG Positions

More specifically, Deep Basin Capital was the largest shareholder of Jagged Peak Energy Inc. (NYSE:JAG), with a stake worth $30.1 million reported as of the end of September. Trailing Deep Basin Capital was Citadel Investment Group, which amassed a stake valued at $18.9 million. Encompass Capital Advisors, Adage Capital Management, and GLG Partners were also very fond of the stock, giving the stock large weights in their portfolios.

Judging by the fact that Jagged Peak Energy Inc. (NYSE:JAG) has faced falling interest from hedge fund managers, logic holds that there exists a select few hedge funds who sold off their positions entirely in the third quarter. At the top of the heap, Paul Marshall and Ian Wace’s Marshall Wace LLP dumped the largest investment of all the hedgies watched by Insider Monkey, valued at about $13.9 million in stock. Mike Vranos’s fund, Ellington, also said goodbye to its stock, about $0.9 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 5 funds in the third quarter.

Let’s now review hedge fund activity in other stocks similar to Jagged Peak Energy Inc. (NYSE:JAG). We will take a look at Lexington Realty Trust (NYSE:LXP), Altair Engineering Inc. (NASDAQ:ALTR), SeaWorld Entertainment Inc (NYSE:SEAS), and Acadia Realty Trust (NYSE:AKR). This group of stocks’ market values are similar to JAG’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
LXP 16 41352 3
ALTR 14 62260 1
SEAS 29 650882 7
AKR 11 113181 2
Average 17.5 216919 3.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 17.5 hedge funds with bullish positions and the average amount invested in these stocks was $217 million. That figure was $84 million in JAG’s case. SeaWorld Entertainment Inc (NYSE:SEAS) is the most popular stock in this table. On the other hand Acadia Realty Trust (NYSE:AKR) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Jagged Peak Energy Inc. (NYSE:JAG) is even less popular than AKR. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. A small number of hedge funds were also right about betting on JAG, though not to the same extent, as the stock returned 22.9% and outperformed the market as well.

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

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading...