The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Pioneer Natural Resources Company (NYSE:PXD).
Pioneer Natural Resources Company (NYSE:PXD) investors should pay attention to a decrease in hedge fund sentiment of late. Our calculations also showed that PXD 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.
If you'd ask most investors, hedge funds are viewed as slow, old investment tools of the past. While there are over 8000 funds trading at present, Our experts choose to focus on the leaders of this group, about 850 funds. These money managers oversee bulk of the smart money's total capital, and by tracking their matchless picks, Insider Monkey has discovered numerous investment strategies that have historically surpassed the S&P 500 index. Insider Monkey's flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
[caption id="attachment_255014" align="aligncenter" width="396"] Clint Carlson of Carlson Capital[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities 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 look at the key hedge fund action encompassing Pioneer Natural Resources Company (NYSE:PXD).
What does smart money think about Pioneer Natural Resources Company (NYSE:PXD)?
At Q1's end, a total of 40 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -25% from the fourth quarter of 2019. On the other hand, there were a total of 55 hedge funds with a bullish position in PXD a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists an "upper tier" of notable hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
The largest stake in Pioneer Natural Resources Company (NYSE:PXD) was held by Adage Capital Management, which reported holding $109.6 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $91.3 million position. Other investors bullish on the company included Encompass Capital Advisors, Abrams Bison Investments, and MFN Partners. In terms of the portfolio weights assigned to each position Abrams Bison Investments allocated the biggest weight to Pioneer Natural Resources Company (NYSE:PXD), around 9.36% of its 13F portfolio. Encompass Capital Advisors is also relatively very bullish on the stock, dishing out 9.24 percent of its 13F equity portfolio to PXD.
Since Pioneer Natural Resources Company (NYSE:PXD) has faced declining sentiment from hedge fund managers, logic holds that there was a specific group of fund managers that decided to sell off their full holdings by the end of the third quarter. It's worth mentioning that Brian J. Higgins's King Street Capital sold off the biggest position of the "upper crust" of funds watched by Insider Monkey, valued at close to $85.7 million in stock. Steve Cohen's fund, Point72 Asset Management, also sold off its stock, about $84.4 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 13 funds by the end of the third quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Pioneer Natural Resources Company (NYSE:PXD) but similarly valued. These stocks are Invitation Homes Inc. (NYSE:INVH), Ryanair Holdings plc (NASDAQ:RYAAY), Arch Capital Group Ltd. (NASDAQ:ACGL), and LINE Corporation (NYSE:LN). All of these stocks' market caps resemble PXD's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position INVH,27,562992,-6 RYAAY,22,550561,0 ACGL,33,733577,10 LN,7,59060,-6 Average,22.25,476548,-0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.25 hedge funds with bullish positions and the average amount invested in these stocks was $477 million. That figure was $535 million in PXD's case. Arch Capital Group Ltd. (NASDAQ:ACGL) is the most popular stock in this table. On the other hand LINE Corporation (NYSE:LN) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Pioneer Natural Resources Company (NYSE:PXD) 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 8.3% in 2020 through the end of May but still managed to beat the market by 13.2 percentage points. Hedge funds were also right about betting on PXD as the stock returned 30.6% so far in Q2 (through the end of May) 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.