Whiting Petroleum Corporation (WLL): Hedge Funds Are Snapping Up

In this article we will check out the progression of hedge fund sentiment towards Whiting Petroleum Corporation (NYSE:WLL) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

Whiting Petroleum Corporation (NYSE:WLL) investors should be aware of an increase in enthusiasm from smart money in recent months. Whiting Petroleum Corporation (NYSE:WLL) was in 21 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 43. Our calculations also showed that WLL isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

At the moment there are numerous indicators shareholders use to analyze stocks. Two of the most underrated indicators are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the top picks of the best fund managers can outperform the S&P 500 by a very impressive margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Michael Gelband of ExodusPoint Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to view the latest hedge fund action regarding Whiting Petroleum Corporation (NYSE:WLL).

Do Hedge Funds Think WLL Is A Good Stock To Buy Now?

Heading into the second quarter of 2021, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of 31% from one quarter earlier. On the other hand, there were a total of 12 hedge funds with a bullish position in WLL a year ago. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

Is WLL A Good Stock To Buy?

More specifically, SIR Capital Management was the largest shareholder of Whiting Petroleum Corporation (NYSE:WLL), with a stake worth $68.3 million reported as of the end of March. Trailing SIR Capital Management was Encompass Capital Advisors, which amassed a stake valued at $33.2 million. Millennium Management, Graham Capital Management, and Glendon Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position SIR Capital Management allocated the biggest weight to Whiting Petroleum Corporation (NYSE:WLL), around 11.51% of its 13F portfolio. Glendon Capital Management is also relatively very bullish on the stock, designating 2.62 percent of its 13F equity portfolio to WLL.

As industrywide interest jumped, specific money managers have been driving this bullishness. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the biggest position in Whiting Petroleum Corporation (NYSE:WLL). Marshall Wace LLP had $2.2 million invested in the company at the end of the quarter. Cliff Asness’s AQR Capital Management also initiated a $1.4 million position during the quarter. The other funds with new positions in the stock are Michael Gelband’s ExodusPoint Capital, Joel Greenblatt’s Gotham Asset Management, and Karim Abbadi and Edward McBride’s Centiva Capital.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Whiting Petroleum Corporation (NYSE:WLL) but similarly valued. These stocks are First Commonwealth Financial (NYSE:FCF), Middlesex Water Company (NASDAQ:MSEX), Nurix Therapeutics, Inc. (NASDAQ:NRIX), Raven Industries, Inc. (NASDAQ:RAVN), e.l.f. Beauty, Inc. (NYSE:ELF), Calavo Growers, Inc. (NASDAQ:CVGW), and H&E Equipment Services, Inc. (NASDAQ:HEES). This group of stocks’ market valuations match WLL’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FCF 13 21078 1
MSEX 8 58560 3
NRIX 17 302452 6
RAVN 16 98313 2
ELF 21 138769 -8
CVGW 9 64050 -1
HEES 14 67670 -3
Average 14 107270 0

View table here if you experience formatting issues.

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $107 million. That figure was $224 million in WLL’s case. e.l.f. Beauty, Inc. (NYSE:ELF) is the most popular stock in this table. On the other hand Middlesex Water Company (NASDAQ:MSEX) is the least popular one with only 8 bullish hedge fund positions. Whiting Petroleum Corporation (NYSE:WLL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for WLL is 74.7. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and still beat the market by 7.7 percentage points. Hedge funds were also right about betting on WLL as the stock returned 30.8% since the end of Q1 (through 7/16) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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