How Canadian Natural Resource Ltd (USA) (CNQ) Stacks Up Against Its Peers

Judging by the fact that Canadian Natural Resource Ltd (USA) (NYSE:CNQ) has faced declining sentiment from the smart money, it’s safe to say that there exists a select few hedgies who were dropping their full holdings in the third quarter. Interestingly, Jean-Marie Eveillard’s First Eagle Investment Management cut the largest investment of the “upper crust” of funds tracked by Insider Monkey, worth close to $154.3 million in stock, and Jorge Paulo Lemann’s 3G Capital was right behind this move, as the fund said goodbye to about $30.8 million worth. These moves are important to note, as total 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 Canadian Natural Resource Ltd (USA) (NYSE:CNQ). We will take a look at Yum! Brands, Inc. (NYSE:YUM), Estee Lauder Companies Inc (NYSE:EL), Emerson Electric Co. (NYSE:EMR), and Charles Schwab Corp (NYSE:SCHW). This group of stocks’ market valuations match CNQ’s market valuation.

As you can see these stocks had an average of 35.75 hedge funds with bullish positions and the average amount invested in these stocks was $1965 million. That figure was $405 million in CNQ’s case. Charles Schwab Corp (NYSE:SCHW) is the most popular stock in this table. On the other hand Emerson Electric Co. (NYSE:EMR) is the least popular one with only 28 bullish hedge fund positions. Compared to these stocks Canadian Natural Resource Ltd (USA) (NYSE:CNQ) is even less popular than EMR. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.