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Was The Smart Money Right About EOG Resources Inc (EOG)?

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The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on December 31st. We at Insider Monkey have made an extensive database of more than 887 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded EOG Resources Inc (NYSE:EOG) based on those filings.

EOG Resources Inc (NYSE:EOG) has seen an increase in support from the world's most elite money managers lately. EOG Resources Inc (NYSE:EOG) was in 45 hedge funds' portfolios at the end of December. The all time high for this statistic is 60. There were 36 hedge funds in our database with EOG holdings at the end of September. Our calculations also showed that EOG isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can't expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds' moves today.

Billionaire David Siegel's Top 10 Stock Picks
Billionaire David Siegel's Top 10 Stock Picks

David Siegel of Two Sigma Advisors

At Insider Monkey we leave no stone unturned when looking for 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 hydrogen fuel cell 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. With all of this in mind we're going to take a gander at the new hedge fund action regarding EOG Resources Inc (NYSE:EOG).

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

Heading into the first quarter of 2021, a total of 45 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from the previous quarter. By comparison, 43 hedge funds held shares or bullish call options in EOG a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is EOG A Good Stock To Buy?
Is EOG A Good Stock To Buy?

Among these funds, Two Sigma Advisors held the most valuable stake in EOG Resources Inc (NYSE:EOG), which was worth $179.3 million at the end of the fourth quarter. On the second spot was Adage Capital Management which amassed $163.3 million worth of shares. Lyrical Asset Management, D E Shaw, and Renaissance Technologies 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 Mountain Lake Investment Management allocated the biggest weight to EOG Resources Inc (NYSE:EOG), around 6.08% of its 13F portfolio. Cartenna Capital is also relatively very bullish on the stock, designating 2.32 percent of its 13F equity portfolio to EOG.

As one would reasonably expect, specific money managers have jumped into EOG Resources Inc (NYSE:EOG) headfirst. Impala Asset Management, managed by Robert Bishop, initiated the most outsized position in EOG Resources Inc (NYSE:EOG). Impala Asset Management had $16.4 million invested in the company at the end of the quarter. William Harnisch's Peconic Partners LLC also initiated a $12.5 million position during the quarter. The following funds were also among the new EOG investors: Brad Dunkley and Blair Levinsky's Waratah Capital Advisors, Clint Murray's Lodge Hill Capital, and Peter Avellone's Cartenna Capital.

Let's now take a look at hedge fund activity in other stocks similar to EOG Resources Inc (NYSE:EOG). These stocks are Banco Bradesco SA (NYSE:BBD), WEC Energy Group, Inc. (NYSE:WEC), Teladoc Health, Inc (NYSE:TDOC), Huazhu Group Limited (NASDAQ:HTHT), Corteva, Inc. (NYSE:CTVA), Motorola Solutions Inc (NYSE:MSI), and Stanley Black & Decker, Inc. (NYSE:SWK). This group of stocks' market caps are closest to EOG's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BBD,17,407632,-3 WEC,25,245402,3 TDOC,50,2616714,3 HTHT,23,612105,2 CTVA,38,1398326,2 MSI,35,777259,6 SWK,38,846102,0 Average,32.3,986220,1.9 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 32.3 hedge funds with bullish positions and the average amount invested in these stocks was $986 million. That figure was $750 million in EOG's case. Teladoc Health, Inc (NYSE:TDOC) is the most popular stock in this table. On the other hand Banco Bradesco SA (NYSE:BBD) is the least popular one with only 17 bullish hedge fund positions. EOG Resources Inc (NYSE:EOG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for EOG is 74.9. 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 10 most popular stocks among hedge funds returned 90.7% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 35 percentage points. These stocks gained 13.6% in 2021 through April 30th and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on EOG as the stock returned 49.4% since the end of Q4 (through 4/30) 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.

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