Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the first quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Antero Resources Corp (NYSE:AR) based on that data.
Antero Resources Corp (NYSE:AR) was in 21 hedge funds' portfolios at the end of March. AR has seen a decrease in activity from the world's largest hedge funds lately. There were 25 hedge funds in our database with AR holdings at the end of the previous quarter. Our calculations also showed that AR isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we're going to take a glance at the new hedge fund action regarding Antero Resources Corp (NYSE:AR).
What does smart money think about Antero Resources Corp (NYSE:AR)?
At the end of the first quarter, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of -16% from the fourth quarter of 2019. On the other hand, there were a total of 27 hedge funds with a bullish position in AR a year ago. With hedge funds' sentiment swirling, there exists a few key hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
More specifically, SailingStone Capital Partners was the largest shareholder of Antero Resources Corp (NYSE:AR), with a stake worth $15.2 million reported as of the end of September. Trailing SailingStone Capital Partners was FPR Partners, which amassed a stake valued at $12.6 million. Shah Capital Management, Brave Warrior Capital, and AQR 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 SailingStone Capital Partners allocated the biggest weight to Antero Resources Corp (NYSE:AR), around 8.53% of its 13F portfolio. Shah Capital Management is also relatively very bullish on the stock, setting aside 5.63 percent of its 13F equity portfolio to AR.
Judging by the fact that Antero Resources Corp (NYSE:AR) has experienced a decline in interest from the smart money, logic holds that there is a sect of fund managers that decided to sell off their entire stakes heading into Q4. It's worth mentioning that Jim O'Brien and Jonathan Dorfman's Napier Park Global Capital said goodbye to the largest stake of the "upper crust" of funds followed by Insider Monkey, totaling an estimated $1.6 million in stock, and Joel Greenblatt's Gotham Asset Management was right behind this move, as the fund cut about $1.5 million worth. These moves are important to note, as total hedge fund interest fell by 4 funds heading into Q4.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Antero Resources Corp (NYSE:AR) but similarly valued. We will take a look at Howard Bancorp Inc (NASDAQ:HBMD), Tarena International Inc (NASDAQ:TEDU), OptiNose, Inc. (NASDAQ:OPTN), and Telenav Inc (NASDAQ:TNAV). This group of stocks' market values are closest to AR's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position HBMD,6,10753,3 TEDU,2,3437,0 OPTN,11,16969,-5 TNAV,13,46283,0 Average,8,19361,-0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $19 million. That figure was $51 million in AR's case. Telenav Inc (NASDAQ:TNAV) is the most popular stock in this table. On the other hand Tarena International Inc (NASDAQ:TEDU) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Antero Resources Corp (NYSE:AR) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 12.2% in 2020 through June 17th but still managed to beat the market by 14.8 percentage points. Hedge funds were also right about betting on AR as the stock returned 431% so far in Q2 (through June 17th) 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.