The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 887 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their December 31st holdings, data that is available nowhere else. Should you consider ConocoPhillips (NYSE:COP) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is ConocoPhillips (COP) stock a buy or sell? Prominent investors were becoming more confident. The number of long hedge fund bets moved up by 4 lately. ConocoPhillips (NYSE:COP) was in 49 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 70. Our calculations also showed that COP isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 124 percentage points since March 2017 (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. Recently Oregon became the first state to legalize psychedelic mushrooms which are shown to have promising results in treating depression, addiction, and PTSD in early stage academic studies. So, we are checking out this psychedelic drug stock idea right now. We go through lists like the 10 best biotech stocks to invest in to pick the next stock that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage (or at the end of this article).With all of this in mind we’re going to take a look at the fresh hedge fund action encompassing ConocoPhillips (NYSE:COP).
Do Hedge Funds Think COP Is A Good Stock To Buy Now?
At the end of December, a total of 49 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 9% from the third quarter of 2020. By comparison, 62 hedge funds held shares or bullish call options in COP a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Fisher Asset Management was the largest shareholder of ConocoPhillips (NYSE:COP), with a stake worth $204.5 million reported as of the end of December. Trailing Fisher Asset Management was Point72 Asset Management, which amassed a stake valued at $66.4 million. Yacktman Asset Management, Citadel Investment Group, and Two Sigma Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Elm Ridge Capital allocated the biggest weight to ConocoPhillips (NYSE:COP), around 4.42% of its 13F portfolio. Hi-Line Capital Management is also relatively very bullish on the stock, designating 2.78 percent of its 13F equity portfolio to COP.
As industrywide interest jumped, key hedge funds have been driving this bullishness. Impala Asset Management, managed by Robert Bishop, assembled the most outsized position in ConocoPhillips (NYSE:COP). Impala Asset Management had $17.7 million invested in the company at the end of the quarter. Louis Bacon’s Moore Global Investments also initiated a $7 million position during the quarter. The following funds were also among the new COP investors: Michael Gelband’s ExodusPoint Capital, Brad Dunkley and Blair Levinsky’s Waratah Capital Advisors, and Greg Eisner’s Engineers Gate Manager.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as ConocoPhillips (NYSE:COP) but similarly valued. We will take a look at General Dynamics Corporation (NYSE:GD), IDEXX Laboratories, Inc. (NASDAQ:IDXX), Constellation Brands, Inc. (NYSE:STZ), Sumitomo Mitsui Financial Grp, Inc. (NYSE:SMFG), The Kraft Heinz Company (NASDAQ:KHC), Metlife Inc (NYSE:MET), and Roku, Inc. (NASDAQ:ROKU). This group of stocks’ market caps resemble COP’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 41 hedge funds with bullish positions and the average amount invested in these stocks was $3613 million. That figure was $687 million in COP’s case. Roku, Inc. (NASDAQ:ROKU) is the most popular stock in this table. On the other hand Sumitomo Mitsui Financial Grp, Inc. (NYSE:SMFG) is the least popular one with only 10 bullish hedge fund positions. ConocoPhillips (NYSE:COP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for COP is 69. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and still beat the market by 0.8 percentage points. Hedge funds were also right about betting on COP as the stock returned 32.7% since the end of Q4 (through 3/19) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Conocophillips (NYSE:COP)
Follow Conocophillips (NYSE:COP)
Disclosure: None. This article was originally published at Insider Monkey.