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Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds' 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about California Resources Corporation (NYSE:CRC) in this article.
California Resources Corporation (NYSE:CRC) investors should be aware of an increase in support from the world's most elite money managers of late. California Resources Corporation (NYSE:CRC) was in 25 hedge funds' portfolios at the end of the third quarter of 2021. The all time high for this statistic is 23. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that CRC isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Keeping this in mind we're going to take a glance at the recent hedge fund action encompassing California Resources Corporation (NYSE:CRC).
Steven Tananbaum of GoldenTree Asset Management
Do Hedge Funds Think CRC Is A Good Stock To Buy Now?
At Q3's end, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in CRC over the last 25 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, GoldenTree Asset Management was the largest shareholder of California Resources Corporation (NYSE:CRC), with a stake worth $426.3 million reported as of the end of September. Trailing GoldenTree Asset Management was Encompass Capital Advisors, which amassed a stake valued at $94.5 million. Millennium Management, Orbis Investment Management, and Senator Investment Group 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 GoldenTree Asset Management allocated the biggest weight to California Resources Corporation (NYSE:CRC), around 17.55% of its 13F portfolio. Elm Ridge Capital is also relatively very bullish on the stock, designating 5.85 percent of its 13F equity portfolio to CRC.
Consequently, key hedge funds were breaking ground themselves. Senator Investment Group, managed by Doug Silverman and Alexander Klabin, created the largest position in California Resources Corporation (NYSE:CRC). Senator Investment Group had $41 million invested in the company at the end of the quarter. Mike Masters's Masters Capital Management also made a $20.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, Michael Gelband's ExodusPoint Capital, and Cliff Asness's AQR Capital Management.
Let's now take a look at hedge fund activity in other stocks similar to California Resources Corporation (NYSE:CRC). We will take a look at New Jersey Resources Corp (NYSE:NJR), Overstock.com, Inc. (NASDAQ:OSTK), PROG Holdings Inc (NYSE:PRG), Beacon Roofing Supply, Inc. (NASDAQ:BECN), CareDx, Inc. (NASDAQ:CDNA), Enel Chile S.A. (NYSE:ENIC), and EnLink Midstream LLC (NYSE:ENLC). This group of stocks' market values resemble CRC's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NJR,9,15695,-3 OSTK,26,257834,-2 PRG,27,298150,-10 BECN,20,242330,0 CDNA,29,637935,1 ENIC,7,14536,0 ENLC,10,26653,0 Average,18.3,213305,-2 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.3 hedge funds with bullish positions and the average amount invested in these stocks was $213 million. That figure was $755 million in CRC's case. CareDx, Inc. (NASDAQ:CDNA) is the most popular stock in this table. On the other hand Enel Chile S.A. (NYSE:ENIC) is the least popular one with only 7 bullish hedge fund positions. California Resources Corporation (NYSE:CRC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CRC is 80.9. 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 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. Hedge funds were also right about betting on CRC as the stock returned 9.7% since the end of Q3 (through 12/9) 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.