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Do Hedge Funds Love Halliburton Company (HAL)?

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We at Insider Monkey have gone over 873 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of June 30th. In this article, we look at what those funds think of Halliburton Company (NYSE:HAL) based on that data.

Halliburton Company (NYSE:HAL) has seen an increase in enthusiasm from smart money lately. Halliburton Company (NYSE:HAL) was in 29 hedge funds' portfolios at the end of June. The all time high for this statistic is 62. There were 28 hedge funds in our database with HAL holdings at the end of March. Our calculations also showed that HAL isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

If you'd ask most stock holders, hedge funds are seen as unimportant, old financial tools of the past. While there are over 8000 funds in operation at the moment, We choose to focus on the crème de la crème of this group, about 850 funds. These money managers handle the majority of the smart money's total asset base, and by monitoring their matchless picks, Insider Monkey has formulated several investment strategies that have historically outpaced the S&P 500 index. Insider Monkey's flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Also, our monthly newsletter's portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

Clint Carlson of Carlson Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV 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 let's check out the new hedge fund action encompassing Halliburton Company (NYSE:HAL).

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

At second quarter's end, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 4% from the previous quarter. By comparison, 30 hedge funds held shares or bullish call options in HAL a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Richard S. Pzena's Pzena Investment Management has the biggest position in Halliburton Company (NYSE:HAL), worth close to $889.4 million, comprising 3.5% of its total 13F portfolio. Coming in second is Holocene Advisors, led by Brandon Haley, holding a $111.1 million position; 0.6% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors that hold long positions encompass Ken Fisher's Fisher Asset Management, Israel Englander's Millennium Management and Ken Heebner's Capital Growth Management. In terms of the portfolio weights assigned to each position Pzena Investment Management allocated the biggest weight to Halliburton Company (NYSE:HAL), around 3.46% of its 13F portfolio. Covalent Capital Partners is also relatively very bullish on the stock, dishing out 2.95 percent of its 13F equity portfolio to HAL.

Now, key money managers have been driving this bullishness. Capital Growth Management, managed by Ken Heebner, assembled the most outsized position in Halliburton Company (NYSE:HAL). Capital Growth Management had $30.1 million invested in the company at the end of the quarter. Steve Cohen's Point72 Asset Management also initiated a $9 million position during the quarter. The following funds were also among the new HAL investors: Matthew Hulsizer's PEAK6 Capital Management, Clint Carlson's Carlson Capital, and Anand Parekh's Alyeska Investment Group.

Let's also examine hedge fund activity in other stocks similar to Halliburton Company (NYSE:HAL). These stocks are Take-Two Interactive Software, Inc. (NASDAQ:TTWO), Steris Plc (NYSE:STE), Trimble Inc. (NASDAQ:TRMB), Ingersoll Rand Inc. (NYSE:IR), Ameren Corporation (NYSE:AEE), Fox Corporation (NASDAQ:FOX), and ZoomInfo Technologies Inc. (NASDAQ:ZI). This group of stocks' market valuations resemble HAL's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TTWO,55,1313646,14 STE,35,1783774,5 TRMB,27,1799575,4 IR,31,873484,-4 AEE,23,212535,4 FOX,25,590317,0 ZI,35,670224,11 Average,33,1034794,4.9 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 33 hedge funds with bullish positions and the average amount invested in these stocks was $1035 million. That figure was $1336 million in HAL's case. Take-Two Interactive Software, Inc. (NASDAQ:TTWO) is the most popular stock in this table. On the other hand Ameren Corporation (NYSE:AEE) is the least popular one with only 23 bullish hedge fund positions. Halliburton Company (NYSE:HAL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for HAL is 29.4. 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 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. A small number of hedge funds were also right about betting on HAL as the stock returned 12.8% since the end of the second quarter (through 10/15) and outperformed the market by an even larger margin.

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