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Were Hedge Funds Right About Flocking Into Crescent Point Energy Corp (CPG) ?

Is Crescent Point Energy Corp (NYSE:CPG) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.

Crescent Point Energy Corp (NYSE:CPG) was in 16 hedge funds’ portfolios at the end of the fourth quarter of 2018. CPG has seen an increase in activity from the world’s largest hedge funds in recent months. There were 12 hedge funds in our database with CPG holdings at the end of the previous quarter. Our calculations also showed that cpg isn’t among the 30 most popular stocks among hedge funds.

In the financial world there are numerous signals shareholders can use to assess stocks. A couple of the best signals are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the top picks of the elite money managers can outclass the broader indices by a healthy amount (see the details here).

RENAISSANCE TECHNOLOGIES

Let’s take a peek at the new hedge fund action regarding Crescent Point Energy Corp (NYSE:CPG).

What does the smart money think about Crescent Point Energy Corp (NYSE:CPG)?

At Q4’s end, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 33% from the previous quarter. By comparison, 13 hedge funds held shares or bullish call options in CPG a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with CPG Positions

Among these funds, Arrowstreet Capital held the most valuable stake in Crescent Point Energy Corp (NYSE:CPG), which was worth $22.5 million at the end of the fourth quarter. On the second spot was Luminus Management which amassed $18.5 million worth of shares. Moreover, Millennium Management, Encompass Capital Advisors, and Renaissance Technologies were also bullish on Crescent Point Energy Corp (NYSE:CPG), allocating a large percentage of their portfolios to this stock.

Now, key money managers have jumped into Crescent Point Energy Corp (NYSE:CPG) headfirst. Luminus Management, managed by Jonathan Barrett and Paul Segal, initiated the biggest position in Crescent Point Energy Corp (NYSE:CPG). Luminus Management had $18.5 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also initiated a $10.7 million position during the quarter. The other funds with brand new CPG positions are D. E. Shaw’s D E Shaw, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, and John Overdeck and David Siegel’s Two Sigma Advisors.

Let’s check out hedge fund activity in other stocks similar to Crescent Point Energy Corp (NYSE:CPG). We will take a look at Coca-Cola Consolidated, Inc. (NASDAQ:COKE), The RMR Group Inc. (NASDAQ:RMR), LTC Properties Inc (NYSE:LTC), and Advanced Energy Industries, Inc. (NASDAQ:AEIS). This group of stocks’ market values are similar to CPG’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
COKE 7 4650 -2
RMR 14 42211 5
LTC 12 35330 3
AEIS 15 137880 -4
Average 12 55018 0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $55 million. That figure was $83 million in CPG’s case. Advanced Energy Industries, Inc. (NASDAQ:AEIS) is the most popular stock in this table. On the other hand Coca-Cola Consolidated, Inc. (NASDAQ:COKE) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Crescent Point Energy Corp (NYSE:CPG) is more popular among hedge funds. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Hedge funds were also right about betting on CPG as the stock returned 46.5% and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

Disclosure: None. This article was originally published at Insider Monkey.

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