Even though oil is up by more than 2.1% on Friday, non-energy stocks are tumbling as disappointing earnings in several major tech and non-tech companies has pulled indexes down. However, a few stocks are moving in the opposite direction. This is the case for Chesapeake Energy Corporation (NYSE:CHK), Whiting Petroleum Corp (NYSE:WLL), Norfolk Southern Corp. (NYSE:NSC), Endo International plc – Ordinary Shares (NASDAQ:ENDP) and Vivint Solar Inc (NYSE:VSLR), all of which are trading up on Friday afternoon. Let’s take a look into the events driving these stocks higher today, and see what the hedge funds in our database think about the companies in question.
At Insider Monkey, we track more than 785 hedge funds, whose 13F filings we analyze as part of our small-cap strategy. Our research has shown that imitating a portfolio that includes the 15 most popular small-cap stocks among hedge funds can outperform the market by as much as 95 basis points per month on average (see more details here).
Chesapeake Surges Along With Energy Prices
Let’s start with Chesapeake Energy Corporation (NYSE:CHK), which is up by more than 5.8% in early afternoon trading, accompanying the surge of several other oil and gas exploration and production stocks, including ConocoPhillips (NYSE:COP), Occidental Petroleum Corporation (NYSE:OXY), Anadarko Petroleum Corporation (NYSE:APC), and Southwestern Energy Company (NYSE:SWN). The spikes look like a response to higher energy prices: Brent and WTI Crude Oil have each gained more than 2.1% so far, and are both trading above $44 per barrel. Natural gas is also up, by 1.45%.
Among the funds that we track, 32 held long positions in Chesapeake Energy Corporation (NYSE:CHK) heading into 2016, with their stakes amassing almost 24% of the company’s total shares as of December 31. Carl Icahn’s Icahn Capital LP was the largest institutional investor of record in the company, holding 73.05 million shares. However, on February 12, Mason Hawkins’ Southeastern Asset Management displaced Icahn after declaring ownership of 89.57 million shares, up from 55.67 million shares held on December 31.
Rising Crude Prices Also Help Whiting
Next up is Whiting Petroleum Corp (NYSE:WLL), which is up by roughly 8% in Friday trading, which is also being driven by higher oil prices. For its part, the surge in crude prices seems to be caused by more bullish market sentiment, helped by signs that the supply glut might be easing. Among other things, investment appears to be returning to the sector thanks to unexpectedly low inventories in the U.S were revealed earlier this week. Coupled with a global decline in production, supply and demand for oil has greatly improved from just a few months ago.
By the end of the fourth quarter, Whiting Petroleum Corp (NYSE:WLL) counted the support of 40 funds from our database, with their stakes accounting for more than 22% of the company’s float. Billionaire Israel Englander’s Millennium Management held the largest position among the funds that we track, comprised of 8.85 million shares valued at more than $83 million.
We discuss three more hot stocks on the next page.