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. What do these smart investors think about California Resources Corporation (NYSE:CRC)?
Is California Resources Corporation (NYSE:CRC) ready to rally soon? The smart money is reducing their bets on the stock. The number of long hedge fund bets decreased by 12 recently. Our calculations also showed that CRC 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). CRC was in 7 hedge funds' portfolios at the end of March. There were 19 hedge funds in our database with CRC positions at the end of the previous quarter. Video: Watch our video about the top 5 most popular hedge fund stocks.
If you'd ask most traders, hedge funds are viewed as unimportant, outdated investment vehicles of yesteryear. While there are more than 8000 funds with their doors open today, We hone in on the bigwigs of this group, around 850 funds. These money managers shepherd the majority of the hedge fund industry's total capital, and by keeping an eye on their finest equity investments, Insider Monkey has identified many investment strategies that have historically defeated the market. Insider Monkey's flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points per year 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_193011" align="aligncenter" width="400"] Ron Gutfleish of Elm Ridge Capital[/caption]
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 stocks recommended/scorned by legendary Bill Miller. 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. Keeping this in mind we're going to go over the new hedge fund action encompassing California Resources Corporation (NYSE:CRC).
How have hedgies been trading California Resources Corporation (NYSE:CRC)?
At Q1's end, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -63% from the fourth quarter of 2019. On the other hand, there were a total of 15 hedge funds with a bullish position in CRC a year ago. With hedge funds' positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ken Griffin's Citadel Investment Group has the number one call position in California Resources Corporation (NYSE:CRC), worth close to $0.6 million, accounting for less than 0.1%% of its total 13F portfolio. The second most bullish fund manager is Ron Gutfleish of Elm Ridge Capital, with a $0.3 million position; 1% of its 13F portfolio is allocated to the company. Remaining members of the smart money that hold long positions comprise Ken Griffin's Citadel Investment Group, John Overdeck and David Siegel's Two Sigma Advisors and D. E. Shaw's D E Shaw. In terms of the portfolio weights assigned to each position Elm Ridge Capital allocated the biggest weight to California Resources Corporation (NYSE:CRC), around 0.99% of its 13F portfolio. Bourgeon Capital is also relatively very bullish on the stock, earmarking 0.01 percent of its 13F equity portfolio to CRC.
Seeing as California Resources Corporation (NYSE:CRC) has witnessed falling interest from the aggregate hedge fund industry, it's easy to see that there exists a select few fund managers that decided to sell off their full holdings by the end of the first quarter. It's worth mentioning that Stephen C. Freidheim's Cyrus Capital Partners sold off the biggest position of the 750 funds followed by Insider Monkey, comprising an estimated $10.9 million in stock, and Israel Englander's Millennium Management was right behind this move, as the fund dropped about $10.8 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 12 funds by the end of the first quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as California Resources Corporation (NYSE:CRC) but similarly valued. We will take a look at Altimmune, Inc. (NASDAQ:ALT), Condor Hospitality Trust, Inc. (NASDAQ:CDOR), Crown Crafts, Inc. (NASDAQ:CRWS), and CBM Bancorp, Inc. (NASDAQ:CBMB). This group of stocks' market valuations are similar to CRC's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ALT,2,2283,-3 CDOR,4,2346,-3 CRWS,6,6723,0 CBMB,3,995,-1 Average,3.75,3087,-1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.75 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $1 million in CRC's case. Crown Crafts, Inc. (NASDAQ:CRWS) is the most popular stock in this table. On the other hand Altimmune, Inc. (NASDAQ:ALT) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks California Resources Corporation (NYSE:CRC) 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 13.9% in 2020 through June 10th but still managed to beat the market by 14.2 percentage points. Hedge funds were also right about betting on CRC as the stock returned 58% so far in Q2 (through June 10th) 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.