What Smart Money Thinks of Western Refining, Inc. (WNR)?

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 500 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 surrounding Western Refining, Inc. (NYSE:WNR).

Overall, Western Refining, Inc. (NYSE:WNR) has experienced an increase in hedge fund sentiment lately, although the level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Universal Forest Products, Inc. (NASDAQ:UFPI), Hawk Corporation (NYSE:HAWK), and Grand Canyon Education Inc (NASDAQ:LOPE) to gather more data points.

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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.

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Now, let’s take a gander at the new action regarding Western Refining, Inc. (NYSE:WNR).

What does the smart money think about Western Refining, Inc. (NYSE:WNR)?

Heading into the fourth quarter of 2016, a total of 27 of the hedge funds tracked by Insider Monkey held long positions in Western Refining, Inc. (NYSE:WNR), which represents an increase of 17% from the end of June. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).


According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Steve Cohen’s Point72 Asset Management has the biggest position in Western Refining, Inc. (NYSE:WNR), worth close to $83.3 million, amounting to 0.6% of its total 13F portfolio. On Point72 Asset Management’s heels is Zach Schreiber of Point State Capital, with a $43.1 million position; 0.4% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that are bullish consist of Neil Chriss’ Hutchin Hill Capital, Cliff Asness’ AQR Capital Management, and David E. Shaw’s D E Shaw.

Now, some big names were leading the bulls’ herd. Point State Capital, managed by Zach Schreiber, established the largest position in Western Refining, Inc. (NYSE:WNR). Point State Capital had $43.1 million invested in the company at the end of the third quater. Vince Maddi and Shawn Brennan’s SIR Capital Management also made a $8.2 million investment in the stock during the quarter. The following funds were also among the new WNR investors: Curtis Macnguyen’s Ivory Capital (Investment Mgmt), Michael Platt and William Reeves’s BlueCrest Capital Mgmt., and Richard Driehaus’ Driehaus Capital.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Western Refining, Inc. (NYSE:WNR) but similarly valued. These stocks are Universal Forest Products, Inc. (NASDAQ:UFPI), Hawk Corporation (NYSE:HAWK), Grand Canyon Education Inc (NASDAQ:LOPE), and Abengoa Yield PLC (NASDAQ:ABY). This group of stocks’ market valuations resemble WNR’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
UFPI 14 83423 -1
HAWK 31 327962 9
LOPE 19 133360 0
ABY 13 385412 1

As you can see these stocks had an average of 19 funds with bullish positions and the average amount invested in these stocks was $233 million. That figure was $300 million in WNR’s case. Hawk Corporation (NYSE:HAWK) is the most popular stock in this table with 31 funds reporting long positions as of the end of September. On the other hand Abengoa Yield PLC (NASDAQ:ABY) is the least popular one with only 13 bullish hedge fund positions. Western Refining, Inc. (NYSE:WNR) 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 Hawk Corporation (NYSE:HAWK) might be a better candidate to consider a long position.