Range Resources Corp. (NYSE:RRC) reported a loss of $119 million for the second quarter yesterday, representing a loss of $0.71 per share. For the same quarter last year, the company posted a profit of $171 million, or $1.04 per share. Although the oil and gas company did well to cut down on costs, the low oil and gas prices that have beset the industry of late couldn’t spare it, leading to the less-than-impressive second quarter results. The company posted revenue of $247.50 million, widely missing the Zacks Consensus Estimate of $395 million. This also represented a 68% drop on a year-over-year basis. The company’s production for the quarter hit a record high of 1,372.6 million cubic feet equivalent per day (MMcfe/d) on average, with natural gas accounting for 70% of the total production. On a year-over-year basis, natural gas liquids production was up by 14%, oil production was up by 10%, and oil and gas production was up by 29%. The company’s long-term debt stood at $3.46 billion, representing a debt-to-capitalization ratio of 50.6%. The $7.63 billion company has reiterated its fiscal year 2015 guidance of s 20% year-over-year growth in production. Shares dropped by 2.98% in trading on Wednesday.
At the end of the first quarter, a total of 39 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of five from the previous quarter. The hedge funds that were long in the stock held an aggregate investment of $1.28 billion, up from the aggregate of $978.46 million held at the end of the fourth quarter of 2014, despite the stock trading down by over 2% during the period, so the smart money was bullish on the stock during the quarter. And while it did experience strong growth in the first half of the second quarter, it’s been a long downhill slide from there. However, as hedge funds may have timed their exit in the second quarter on the rise, we can’t proclaim they were wrong to invest further in the company in the first quarter.
Let’s take a step back and analyze how tracking hedge funds can help an everyday investor. Through our research we discovered that a portfolio of the 15 most popular small-cap picks of hedge funds beat the S&P 500 Total Return Index by nearly a percentage point per month on average between 1999 and 2012. On the other hand the most popular large-cap picks of hedge funds underperformed the same index by seven basis points per month during the same period. This is likely a surprise to many investors, who think of small-caps as risky, unpredictable stocks and put more faith (and money) in large-cap stocks. In forward tests since August 2012 these top small-cap stocks beat the market by an impressive 66 percentage points, returning over 123% (read the details here). Follow the smart money into only their best investment ideas all while avoiding their high fees.
Insider Monkey is also keen on insider activities pertaining to stocks. Over the past three months, the company experienced a lot of insider trading, posting 25 open market buys and 15 sales, involving 278,189 shares and 182,541 shares respectively. As insider purchases are a much stronger indicator than sales, we can say that the quantity of purchases is rather bullish behavior by insiders.
Now, let’s take a look at the latest hedge fund action regarding Range Resources Corp. (NYSE:RRC).