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Is Phillips 66 (PSX) Going to Burn These Hedge Funds?

Judging by the fact that Phillips 66 (NYSE:PSX) has experienced a falling interest from hedge fund managers, logic holds that there was a specific group of hedgies that slashed their positions entirely heading into Q4. At the top of the heap, Dan Loeb’s Third Point said goodbye to the biggest investment of the “upper crust” of funds watched by Insider Monkey, worth close to $261.8 million in stock. Larry Robbins’ fund, Glenview Capital, also sold off its stock, about $147.4 million worth of shares. These bearish behaviors are interesting, as total hedge fund interest was cut by 2 funds heading into Q4.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Phillips 66 (NYSE:PSX) but similarly valued. These stocks are Shire PLC (ADR) (NASDAQ:SHPG), Adobe Systems Incorporated (NASDAQ:ADBE), FedEx Corporation (NYSE:FDX), and The Southern Company (NYSE:SO). This group of stocks’ market values matches Phillips 66 (NYSE:PSX)’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SHPG 43 2498587 -1
ADBE 42 4069926 3
FDX 53 4136169 1
SO 17 360541 -2

As you can see, these stocks had an average of 39 hedge funds with bullish positions and the average amount invested in these stocks was $2.77 billion. That figure was $6.72 million in Phillips 66 (NYSE:PSX)’s case. FedEx Corporation (NYSE:FDX) is the most popular stock in this table. On the other hand, The Southern Company (NYSE:SO) is the least popular one with only 17 bullish hedge fund positions. Phillips 66 (NYSE:PSX) 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, FedEx Corporation (NYSE:FDX) might be a better candidate to consider a long position.

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