The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards ConocoPhillips (NYSE:COP).
Is COP a good stock to buy now? ConocoPhillips (NYSE:COP) investors should pay attention to an increase in hedge fund sentiment of late. ConocoPhillips (NYSE:COP) was in 45 hedge funds’ portfolios at the end of the third 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 Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (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 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this cannabis tech stock right now. We go through lists like the 15 best blue chip stocks to buy to pick the best large-cap stocks to buy. 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 website. With all of this in mind we’re going to analyze the new hedge fund action surrounding ConocoPhillips (NYSE:COP).
Do Hedge Funds Think COP Is A Good Stock To Buy Now?
At third quarter’s end, a total of 45 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 2% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards COP over the last 21 quarters. So, let’s review 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 $161.5 million reported as of the end of September. Trailing Fisher Asset Management was Two Sigma Advisors, which amassed a stake valued at $143.7 million. D E Shaw, Arrowstreet Capital, and Yacktman Asset Management 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 3.98% of its 13F portfolio. Hi-Line Capital Management is also relatively very bullish on the stock, setting aside 2.72 percent of its 13F equity portfolio to COP.
Consequently, specific money managers have jumped into ConocoPhillips (NYSE:COP) headfirst. Holocene Advisors, managed by Brandon Haley, assembled the largest position in ConocoPhillips (NYSE:COP). Holocene Advisors had $35.5 million invested in the company at the end of the quarter. Renaissance Technologies also initiated a $33 million position during the quarter. The other funds with new positions in the stock are Steve Cohen’s Point72 Asset Management, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as ConocoPhillips (NYSE:COP) but similarly valued. These stocks are Twitter Inc (NYSE:TWTR), Cintas Corporation (NASDAQ:CTAS), Southern Copper Corporation (NYSE:SCCO), Dow Inc. (NYSE:DOW), NXP Semiconductors NV (NASDAQ:NXPI), Exelon Corporation (NASDAQ:EXC), and Chipotle Mexican Grill, Inc. (NYSE:CMG). This group of stocks’ market values are closest to COP’s market value.
|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 47.3 hedge funds with bullish positions and the average amount invested in these stocks was $1449 million. That figure was $829 million in COP’s case. Twitter Inc (NYSE:TWTR) is the most popular stock in this table. On the other hand Southern Copper Corporation (NYSE:SCCO) is the least popular one with only 27 bullish hedge fund positions. ConocoPhillips (NYSE:COP) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for COP is 44. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on COP as the stock returned 31.6% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.