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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. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of September 30th. In this article we look at what those investors think of Range Resources Corp. (NYSE:RRC).
Range Resources Corp. (NYSE:RRC) shares haven't seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 25 hedge funds' portfolios at the end of September. Our calculations also showed that RRC isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings). The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Clean Harbors Inc (NYSE:CLH), Fate Therapeutics Inc (NASDAQ:FATE), and Valvoline Inc. (NYSE:VVV) to gather more data points.
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. With all of this in mind we're going to go over the key hedge fund action encompassing Range Resources Corp. (NYSE:RRC).
David Iben of Kopernik Global Investors
Do Hedge Funds Think RRC Is A Good Stock To Buy Now?
At Q3's end, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. By comparison, 23 hedge funds held shares or bullish call options in RRC a year ago. With hedge funds' sentiment swirling, there exists a select group of notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
More specifically, SailingStone Capital Partners was the largest shareholder of Range Resources Corp. (NYSE:RRC), with a stake worth $107.3 million reported as of the end of September. Trailing SailingStone Capital Partners was D E Shaw, which amassed a stake valued at $104.2 million. Contrarius Investment Management, Kopernik Global Investors, and Fisher Asset Management 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 SailingStone Capital Partners allocated the biggest weight to Range Resources Corp. (NYSE:RRC), around 27.12% of its 13F portfolio. Kopernik Global Investors is also relatively very bullish on the stock, dishing out 8.89 percent of its 13F equity portfolio to RRC.
Due to the fact that Range Resources Corp. (NYSE:RRC) has witnessed declining sentiment from hedge fund managers, it's easy to see that there lies a certain "tier" of money managers who sold off their positions entirely last quarter. It's worth mentioning that Brandon Haley's Holocene Advisors dropped the biggest investment of the "upper crust" of funds tracked by Insider Monkey, comprising about $3.5 million in stock, and Kenneth Tropin's Graham Capital Management was right behind this move, as the fund dumped about $1.5 million worth. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now review hedge fund activity in other stocks similar to Range Resources Corp. (NYSE:RRC). These stocks are Clean Harbors Inc (NYSE:CLH), Fate Therapeutics Inc (NASDAQ:FATE), Valvoline Inc. (NYSE:VVV), Harley-Davidson, Inc. (NYSE:HOG), Southwestern Energy Company (NYSE:SWN), Colliers International Group Inc (NASDAQ:CIGI), and Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI). This group of stocks' market caps are closest to RRC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CLH,24,391049,0 FATE,36,2103428,-4 VVV,23,641833,-3 HOG,33,956467,-4 SWN,22,263603,-5 CIGI,16,726941,-1 MRVI,34,1068071,14 Average,26.9,878770,-0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.9 hedge funds with bullish positions and the average amount invested in these stocks was $879 million. That figure was $527 million in RRC's case. Fate Therapeutics Inc (NASDAQ:FATE) is the most popular stock in this table. On the other hand Colliers International Group Inc (NASDAQ:CIGI) is the least popular one with only 16 bullish hedge fund positions. Range Resources Corp. (NYSE:RRC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for RRC is 43.8. 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. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. 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 surpassed the market again by 5.1 percentage points. Unfortunately RRC wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); RRC investors were disappointed as the stock returned -16.1% since the end of September (through 12/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.