Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.
In the financial world there are numerous tools investors put to use to size up stocks. A couple of the less known tools are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the top picks of the elite hedge fund managers can beat the S&P 500 by a significant amount (see the details here).
We’re going to take a look at the key hedge fund action regarding QEP Resources Inc (NYSE:QEP).
What have hedge funds been doing with QEP Resources Inc (NYSE:QEP)?
At the end of the third quarter, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of 16% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards QEP over the last 13 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Elliott Management held the most valuable stake in QEP Resources Inc (NYSE:QEP), which was worth $132.4 million at the end of the third quarter. On the second spot was D E Shaw which amassed $104.4 million worth of shares. Moreover, AQR Capital Management, Point72 Asset Management, and Encompass Capital Advisors were also bullish on QEP Resources Inc (NYSE:QEP), allocating a large percentage of their portfolios to this stock.
Consequently, some big names were breaking ground themselves. Point72 Asset Management, managed by Steve Cohen, assembled the biggest position in QEP Resources Inc (NYSE:QEP). Point72 Asset Management had $48.4 million invested in the company at the end of the quarter. Todd J. Kantor’s Encompass Capital Advisors also made a $30.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Steve Cohen’s Point72 Asset Management, Clint Carlson’s Carlson Capital, and Michael Platt and William Reeves’s BlueCrest Capital Mgmt..
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as QEP Resources Inc (NYSE:QEP) but similarly valued. These stocks are Retail Properties of America Inc (NYSE:RPAI), Cloudera, Inc. (NYSE:CLDR), Integer Holdings Corporation (NYSE:ITGR), and Legg Mason, Inc. (NYSE:LM). This group of stocks’ market values are similar to QEP’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $190 million. That figure was $467 million in QEP’s case. Cloudera, Inc. (NYSE:CLDR) is the most popular stock in this table. On the other hand Retail Properties of America Inc (NYSE:RPAI) is the least popular one with only 14 bullish hedge fund positions. QEP Resources Inc (NYSE:QEP) 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 CLDR might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.