Is Valero Energy Corporation (VLO) a Good Stock To Buy?

Since Valero Energy Corporation (NYSE:VLO) has experienced a decline in interest from the smart money, logic holds that there were a few fund managers that elected to cut their entire stakes in the third quarter. Intriguingly, Ken Griffin’s Citadel Investment Group said goodbye to the largest position of all the hedgies monitored by Insider Monkey, valued at close to $15.2 million in stock. David Costen Haley’s fund, HBK Investments, also cut its stock, about $8.6 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now take a look at hedge fund activity in other stocks similar to Valero Energy Corporation (NYSE:VLO). We will take a look at Consolidated Edison, Inc. (NYSE:ED), Public Service Enterprise Group Inc. (NYSE:PEG), Zoetis Inc (NYSE:ZTS), and Luxottica Group SpA (ADR) (NYSE:LUX). This group of stocks’ market values are similar to VLO’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ED 23 513331 9
PEG 20 604657 -2
ZTS 44 2240000 -2
LUX 3 44058 -1

As you can see these stocks had an average of 23 funds with bullish positions and the average amount invested in these stocks was $851 million. That figure was $860 million in VLO’s case. Zoetis Inc (NYSE:ZTS) is the most popular stock in this table. On the other hand Luxottica Group SpA (ADR) (NYSE:LUX) is the least popular one with only three investors holding shares. Valero Energy Corporation (NYSE:VLO) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard Zoetis Inc (NYSE:ZTS) might be a better candidate to consider a long position.