How Hallador Energy Co (HNRG) Stacks Up Against Its Peers

It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. The S&P 500 Index gained 7.6% in the 12 month-period that ended November 21, while less than 49% of its stocks beat the benchmark. In contrast, the 30 most popular mid-cap stocks among the top hedge fund investors tracked by the Insider Monkey team returned 18% over the same period, which provides evidence that these money managers do have great stock picking abilities. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Hallador Energy Co (NASDAQ:HNRG).

Hallador Energy Co (NASDAQ:HNRG) was in 7 hedge funds’ portfolios at the end of the third quarter of 2016. HNRG investors should pay attention to an increase in hedge fund interest lately. There were 6 hedge funds in our database with HNRG holdings at the end of the previous quarter. At the end of this article we will also compare HNRG to other stocks including RADCOM Ltd. (NASDAQ:RDCM), Concordia Healthcare Corp (NASDAQ:CXRX), and Casa Therapeutics Inc (NASDAQ:CARA) to get a better sense of its popularity.

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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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How are hedge funds trading Hallador Energy Co (NASDAQ:HNRG)?

At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a growth of 17% from the previous quarter. The graph below displays the number of hedge funds with bullish position in HNRG over the last 5 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.


When looking at the institutional investors followed by Insider Monkey, Jeffrey Bronchick’s Cove Street Capital has the number one position in Hallador Energy Co (NASDAQ:HNRG), worth close to $2.5 million. Coming in second is Renaissance Technologies, one of the largest hedge funds in the world, holding a $0.9 million position. Remaining hedge funds and institutional investors that hold long positions include Israel Englander’s Millennium Management, John Overdeck and David Siegel’s Two Sigma Advisors and Glenn Russell Dubin’s Highbridge Capital Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Consequently, specific money managers have been driving this bullishness. Cove Street Capital, led by Jeffrey Bronchick, initiated the most outsized position in Hallador Energy Co (NASDAQ:HNRG). Cove Street Capital had $2.5 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also made a $0.2 million investment in the stock during the quarter. The other funds with brand new HNRG positions are Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Let’s go over hedge fund activity in other stocks similar to Hallador Energy Co (NASDAQ:HNRG). These stocks are RADCOM Ltd. (NASDAQ:RDCM), Concordia Healthcare Corp (NASDAQ:CXRX), Casa Therapeutics Inc (NASDAQ:CARA), and Zagg Inc (NASDAQ:ZAGG). This group of stocks’ market valuations resemble HNRG’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
RDCM 5 28271 5
CXRX 14 36250 -1
CARA 9 12973 1
ZAGG 8 11465 -3

As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $22 million. That figure was $4 million in HNRG’s case. Concordia Healthcare Corp (NASDAQ:CXRX) is the most popular stock in this table. On the other hand RADCOM Ltd. (NASDAQ:RDCM) is the least popular one with only 5 bullish hedge fund positions. Hallador Energy Co (NASDAQ:HNRG) 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 CXRX might be a better candidate to consider taking a long position in.

Disclosure: None