Is EQT A Good Stock To Buy According To Hedge Funds?

At Insider Monkey, we pore over the filings of nearly 817 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not EQT Corporation (NYSE:EQT) makes for a good investment right now.

Is EQT a good stock to buy now? EQT Corporation (NYSE:EQT) investors should pay attention to an increase in enthusiasm from smart money lately. EQT Corporation (NYSE:EQT) was in 39 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 50. There were 34 hedge funds in our database with EQT holdings at the end of June. Our calculations also showed that EQT 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.

To most traders, hedge funds are assumed to be underperforming, old investment tools of the past. While there are over 8000 funds with their doors open at present, Our researchers look at the aristocrats of this group, about 850 funds. Most estimates calculate that this group of people have their hands on the majority of all hedge funds’ total capital, and by tracking their matchless stock picks, Insider Monkey has identified a few investment strategies that have historically surpassed the broader indices. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .

Clint Carlson of Carlson Capital

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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. Keeping this in mind we’re going to go over the key hedge fund action encompassing EQT Corporation (NYSE:EQT).

Do Hedge Funds Think EQT Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2020, a total of 39 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 15% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards EQT over the last 21 quarters. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).

Is EQT A Good Stock To Buy?

Among these funds, Arrowstreet Capital held the most valuable stake in EQT Corporation (NYSE:EQT), which was worth $51.4 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $30.1 million worth of shares. D E Shaw, Caxton Associates LP, and Firefly Value Partners 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 Firefly Value Partners allocated the biggest weight to EQT Corporation (NYSE:EQT), around 33.38% of its 13F portfolio. Quaker Capital Investments is also relatively very bullish on the stock, setting aside 9.23 percent of its 13F equity portfolio to EQT.

Consequently, key money managers were leading the bulls’ herd. Carlson Capital, managed by Clint Carlson, created the most outsized position in EQT Corporation (NYSE:EQT). Carlson Capital had $11 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $9.5 million position during the quarter. The other funds with brand new EQT positions are Suzi Nutton (CEO)’s Lansdowne Partners, Franklin Parlamis’s Aequim Alternative Investments, and Brandon Haley’s Holocene Advisors.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as EQT Corporation (NYSE:EQT) but similarly valued. We will take a look at Granite Real Estate Investment Trust (NYSE:GRP), Saia Inc (NASDAQ:SAIA), J2 Global Inc (NASDAQ:JCOM), Armstrong World Industries, Inc. (NYSE:AWI), Seaboard Corporation (NYSE:SEB), PNM Resources, Inc. (NYSE:PNM), and SelectQuote, Inc. (NYSE:SLQT). This group of stocks’ market values match EQT’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
GRP 6 29425 0
SAIA 20 67732 3
JCOM 25 222865 -5
AWI 30 351590 -4
SEB 16 120834 2
PNM 23 385999 -2
SLQT 14 217874 -15
Average 19.1 199474 -3

View table here if you experience formatting issues.

As you can see these stocks had an average of 19.1 hedge funds with bullish positions and the average amount invested in these stocks was $199 million. That figure was $311 million in EQT’s case. Armstrong World Industries, Inc. (NYSE:AWI) is the most popular stock in this table. On the other hand Granite Real Estate Investment Trust (NYSE:GRP) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks EQT Corporation (NYSE:EQT) is more popular among hedge funds. Our overall hedge fund sentiment score for EQT is 83.4. 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 33.3% in 2020 through December 18th and still beat the market by 16.4 percentage points. Unfortunately EQT wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on EQT were disappointed as the stock returned 4.6% since the end of the third quarter (through 12/18) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

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Disclosure: None. This article was originally published at Insider Monkey.