It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500s Index returned 7.6% over the 12-month period ending November 21, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored mid-cap stocks by the best performing hedge funds monitored by Insider Monkey generated a return of 18% over the same time span. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in Occidental Petroleum Corporation (NYSE:OXY).
Occidental Petroleum Corporation (NYSE:OXY) investors should be aware of an increase in support from the world’s most elite money managers in recent months. However, to get a better sense of its popularity, at the end of this article we will also compare OXY to other stocks including Rio Tinto plc (ADR) (NYSE:RIO), E I Du Pont De Nemours And Co (NYSE:DD), and Banco Santander, S.A. (ADR) (NYSE:SAN).
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.
With all of this in mind, let’s take a look at the new action encompassing Occidental Petroleum Corporation (NYSE:OXY).
How are hedge funds trading Occidental Petroleum Corporation (NYSE:OXY)?
There were 40 investors followed by Insider Monkey that held long positions in Occidental Petroleum Corporation at the end of September, up by 5% over the quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, John A. Levin’s Levin Capital Strategies has the largest position in Occidental Petroleum Corporation (NYSE:OXY), worth close to $203.6 million, amounting to 3% of its total 13F portfolio. The second largest stake is held by Soroban Capital Partners, managed by Eric W. Mandelblatt, which holds a $86.8 million call position; 0.5% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors with similar optimism contain Israel Englander’s Millennium Management and Andrew Hall’s Astenbeck Capital Management.
Consequently, key money managers were leading the bulls’ herd. Soroban Capital Partners established the largest call position in Occidental Petroleum Corporation (NYSE:OXY). Millennium Management also made a $82 million investment in the stock during the quarter. The other funds with new positions in the stock are Gordy Holterman and Derek Dunn’s Overland Advisors, Sander Gerber’s Hudson Bay Capital Management, and Daniel S. Och’s OZ Management.
Let’s go over hedge fund activity in other stocks similar to Occidental Petroleum Corporation (NYSE:OXY). These stocks are Rio Tinto plc (ADR) (NYSE:RIO), E I Du Pont De Nemours And Co (NYSE:DD), Banco Santander, S.A. (ADR) (NYSE:SAN), and Itau Unibanco Holding SA (ADR) (NYSE:ITUB). This group of stocks’ market caps are closest to OXY’s market cap.
|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 24 hedge funds with bullish positions and the average amount invested in these stocks was $1.21 billion. That figure was $1.04 billion in OXY’s case. E I Du Pont De Nemours And Co (NYSE:DD) is the most popular stock in this table. On the other hand, Banco Santander, S.A. (ADR) (NYSE:SAN) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Occidental Petroleum Corporation (NYSE:OXY) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.