Is EOG Stock A Buy or Sell?
The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on December 31st. We at Insider Monkey have made an extensive database of more than 887 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded EOG Resources Inc (NYSE:EOG) based on those filings.
Is EOG stock a buy or sell? EOG Resources Inc (NYSE:EOG) investors should pay attention to an increase in hedge fund sentiment of late. EOG Resources Inc (NYSE:EOG) was in 45 hedge funds' portfolios at the end of December. The all time high for this statistic is 60. There were 36 hedge funds in our database with EOG positions at the end of the third quarter. Our calculations also showed that EOG isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 124 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 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
John Overdeck of Two Sigma Advisors
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. Recently Oregon became the first state to legalize psychedelic mushrooms which are shown to have promising results in treating depression, addiction, and PTSD in early stage academic studies. So, we are checking out this psychedelic drug stock idea right now. We go through lists like the 10 best biotech stocks to invest in to pick the next stock 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 (or at the end of this article). Keeping this in mind we're going to take a peek at the fresh hedge fund action surrounding EOG Resources Inc (NYSE:EOG).
Do Hedge Funds Think EOG Is A Good Stock To Buy Now?
Heading into the first quarter of 2021, a total of 45 of the hedge funds tracked by Insider Monkey were long this stock, a change of 25% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards EOG over the last 22 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Two Sigma Advisors was the largest shareholder of EOG Resources Inc (NYSE:EOG), with a stake worth $179.3 million reported as of the end of December. Trailing Two Sigma Advisors was Adage Capital Management, which amassed a stake valued at $163.3 million. Lyrical Asset Management, D E Shaw, and Renaissance Technologies 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 Mountain Lake Investment Management allocated the biggest weight to EOG Resources Inc (NYSE:EOG), around 6.08% of its 13F portfolio. Cartenna Capital is also relatively very bullish on the stock, setting aside 2.32 percent of its 13F equity portfolio to EOG.
As industrywide interest jumped, key money managers were breaking ground themselves. Impala Asset Management, managed by Robert Bishop, created the largest position in EOG Resources Inc (NYSE:EOG). Impala Asset Management had $16.4 million invested in the company at the end of the quarter. William Harnisch's Peconic Partners LLC also made a $12.5 million investment in the stock during the quarter. The following funds were also among the new EOG investors: Brad Dunkley and Blair Levinsky's Waratah Capital Advisors, Clint Murray's Lodge Hill Capital, and Peter Avellone's Cartenna Capital.
Let's now review hedge fund activity in other stocks similar to EOG Resources Inc (NYSE:EOG). We will take a look at Banco Bradesco SA (NYSE:BBD), WEC Energy Group, Inc. (NYSE:WEC), Teladoc Health, Inc (NYSE:TDOC), Huazhu Group Limited (NASDAQ:HTHT), Corteva, Inc. (NYSE:CTVA), Motorola Solutions Inc (NYSE:MSI), and Stanley Black & Decker, Inc. (NYSE:SWK). All of these stocks' market caps match EOG's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BBD,17,407632,-3 WEC,25,245402,3 TDOC,50,2616714,3 HTHT,23,612105,2 CTVA,38,1398326,2 MSI,35,777259,6 SWK,38,846102,0 Average,32.3,986220,1.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.3 hedge funds with bullish positions and the average amount invested in these stocks was $986 million. That figure was $750 million in EOG's case. Teladoc Health, Inc (NYSE:TDOC) is the most popular stock in this table. On the other hand Banco Bradesco SA (NYSE:BBD) is the least popular one with only 17 bullish hedge fund positions. EOG Resources Inc (NYSE:EOG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for EOG is 74.9. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and still beat the market by 0.8 percentage points. Hedge funds were also right about betting on EOG as the stock returned 41.4% since the end of Q4 (through 3/19) 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.
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