Is CVR Refining LP (CVRR) Going To Burn These Hedge Funds?

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards CVR Refining LP (NYSE:CVRR) .

Is CVR Refining LP (NYSE:CVRR) an outstanding investment today? Hedge funds are actually selling. The number of bullish hedge fund positions slashed by1 in recent months. There were 7 hedge funds in our database with CVRR holdings at the end of the previous quarter. At the end of this article we will also compare CVRR to other stocks including Flow International Corporation (NASDAQ:FLOW), Methode Electronics Inc. (NYSE:MEI), and Denbury Resources Inc. (NYSE:DNR) to get a better sense of its popularity.

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We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.

stockphoto mania/

stockphoto mania/

Now, let’s take a look at the key action surrounding CVR Refining LP (NYSE:CVRR).

Hedge fund activity in CVR Refining LP (NYSE:CVRR)

Heading into the fourth quarter of 2016, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -14% from one quarter earlier. On the other hand, there were a total of 11 hedge funds with a bullish position in CVRR at the beginning of this year. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).


According to Insider Monkey’s hedge fund database, Icahn Capital LP, led by Carl Icahn, holds the most valuable position in CVR Refining LP (NYSE:CVRR). Icahn Capital LP has a $50.4 million position in the stock, comprising 0.3% of its 13F portfolio. On Icahn Capital LP’s heels is Citadel Investment Group, led by Ken Griffin, which holds a $0.6 million call position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions include George Hall’s Clinton Group and Israel Englander’s Millennium Management, one of the largest hedge funds in the world. 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.

Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that dropped their entire stakes in the stock during the third quarter. Intriguingly, Jim Simons’ Renaissance Technologies dropped the largest investment of all the hedgies monitored by Insider Monkey, valued at an estimated $2.8 million in stock.

Let’s also examine hedge fund activity in other stocks similar to CVR Refining LP (NYSE:CVRR). We will take a look at Flow International Corporation (NASDAQ:FLOW), Methode Electronics Inc. (NYSE:MEI), Denbury Resources Inc. (NYSE:DNR), and Apogee Enterprises, Inc. (NASDAQ:APOG). This group of stocks’ market caps resemble CVRR’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FLOW 17 132679 2
MEI 15 118796 -1
DNR 18 65600 -3
APOG 14 71670 1

As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $97 million. That figure was $52 million in CVRR’s case. Denbury Resources Inc. (NYSE:DNR) is the most popular stock in this table. On the other hand Apogee Enterprises, Inc. (NASDAQ:APOG) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks CVR Refining LP (NYSE:CVRR) is even less popular than APOG. 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.

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