We at Insider Monkey have gone over 742 13F filings that hedge funds and prominent investors are required to file by the government. The 13F filings show the funds’ and investors’ portfolio positions as of September 30. In this article, we look at what those funds think of Valero Energy Corporation (NYSE:VLO) based on that data.
Valero Energy Corporation (NYSE:VLO) shares did not see a lot of action during the third quarter and the hedge fund sentiment was unchanged. Overall 42 funds from our database held shares of the company at the end of September. At the end of this article we will also compare VLO to other stocks including Consolidated Edison, Inc. (NYSE:ED), Public Service Enterprise Group Inc. (NYSE:PEG), and Zoetis Inc (NYSE:ZTS) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
Keeping this in mind, we’re going to take a glance at the key action surrounding Valero Energy Corporation (NYSE:VLO).
Hedge fund activity in Valero Energy Corporation (NYSE:VLO)
At the end of September, 42 funds tracked by Insider Monkey were bullish on this stock, unchanged from one quarter earlier. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, AQR Capital Management, led by Cliff Asness, holds the biggest position in Valero Energy Corporation (NYSE:VLO). AQR Capital Management has a $238.7 million position in the stock, comprising 0.4% of its 13F portfolio. The second most bullish fund manager is Robert Pohly’s Samlyn Capital, which holds a $82.2 million position; 2% of its 13F portfolio is allocated to the stock. Remaining professional money managers that are bullish encompass David Harding’s Winton Capital Management, Zach Schreiber’s Point State Capital, and John Overdeck and David Siegel’s Two Sigma Advisors.
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|
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.