Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the first quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Equinor ASA (NYSE:EQNR) based on that data and determine whether they were really smart about the stock.
Is Equinor ASA (NYSE:EQNR) a buy right now? Prominent investors were turning less bullish. The number of bullish hedge fund positions shrunk by 3 recently. Our calculations also showed that EQNR 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.
At the moment there are a multitude of gauges stock traders use to size up their stock investments. A couple of the less utilized gauges are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the best picks of the best hedge fund managers can outperform the broader indices by a significant amount (see the details here).
[caption id="attachment_845793" align="aligncenter" width="400"] Peter Rathjens of Arrowstreet Capital[/caption]
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a "weekend trading strategy", so we look into his strategy's picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller's investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we're going to view the key hedge fund action regarding Equinor ASA (NYSE:EQNR).
How are hedge funds trading Equinor ASA (NYSE:EQNR)?
At Q1's end, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of -21% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards EQNR over the last 18 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
The largest stake in Equinor ASA (NYSE:EQNR) was held by Renaissance Technologies, which reported holding $154.2 million worth of stock at the end of September. It was followed by Point72 Asset Management with a $64.2 million position. Other investors bullish on the company included Fisher Asset Management, Deep Basin Capital, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Deep Basin Capital allocated the biggest weight to Equinor ASA (NYSE:EQNR), around 3.96% of its 13F portfolio. Point72 Asset Management is also relatively very bullish on the stock, designating 0.52 percent of its 13F equity portfolio to EQNR.
Judging by the fact that Equinor ASA (NYSE:EQNR) has witnessed declining sentiment from the aggregate hedge fund industry, it's easy to see that there lies a certain "tier" of fund managers who were dropping their positions entirely heading into Q4. It's worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital said goodbye to the largest stake of the "upper crust" of funds monitored by Insider Monkey, comprising about $9.8 million in stock. George Soros's fund, Soros Fund Management, also dumped its stock, about $2 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds heading into Q4.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Equinor ASA (NYSE:EQNR) but similarly valued. These stocks are Illumina, Inc. (NASDAQ:ILMN), Moody's Corporation (NYSE:MCO), American Electric Power Company, Inc. (NYSE:AEP), and Waste Management, Inc. (NYSE:WM). All of these stocks' market caps match EQNR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ILMN,34,1130705,-9 MCO,50,8552785,1 AEP,38,1070882,4 WM,40,2563267,8 Average,40.5,3329410,1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 40.5 hedge funds with bullish positions and the average amount invested in these stocks was $3329 million. That figure was $281 million in EQNR's case. Moody's Corporation (NYSE:MCO) is the most popular stock in this table. On the other hand Illumina, Inc. (NASDAQ:ILMN) is the least popular one with only 34 bullish hedge fund positions. Compared to these stocks Equinor ASA (NYSE:EQNR) is even less popular than ILMN. 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 gained 12.3% in 2020 through June 30th but managed to beat the market by 15.5 percentage points. A small number of hedge funds were also right about betting on EQNR, though not to the same extent, as the stock returned 23.8% during the second quarter and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.