Hedge funds withdraw money from Centennial Resource Development, Inc. (CDEV)
We know that hedge funds generate strong, risk-adjusted returns over the long term. Therefore, emulating the choices they are collectively optimistic about can be a profitable strategy for retail investors. With billions of dollars in assets, smart investors must perform complex analysis, spend many resources, and use tools that are not always available to the general public. That’s not to say they don’t have occasional colossal losses; they do (like Melvin Capital’s recent GameStop losses). However, it is always a good idea to keep an eye on hedge fund activity. With that in mind, as the current round of 13F filings just ended, let’s take a look at the smart money sentiment towards Centennial Resource Development, Inc. (NASDAQ: CDEV).
East Centennial Resource Development, Inc. (NASDAQ: CDEV) healthy stock for your wallet? Informed investors were losing hope. The number of bullish bets on hedge funds has fallen by 1 recently. Centennial Resource Development, Inc. (NASDAQ: CDEV) was listed in 22 hedge fund portfolios at the end of the second quarter of 2021. The all-time high for this statistic is 29. Our calculations also showed that CDEV is not among the 30 stocks. most popular among hedge funds (click for Q2 ranking). There were 23 hedge funds in our database with CDEV holdings at the end of March.
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Michael Lowenstein of Kensico Capital
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Do hedge funds think CDEV is a good stock to buy now?
At the end of June, 22 of the hedge funds tracked by Insider Monkey held long positions in this security, a variation of -4% compared to the previous quarter. By comparison, 20 hedge funds held bullish stocks or call options in CDEV a year ago. Along with the whirlwind of hedgie sentiment, there is a âtop tierâ of notable hedge fund managers who were drastically increasing their stakes (or already building up large positions).
Specifically, DE Shaw was the largest shareholder in Centennial Resource Development, Inc. (NASDAQ: CDEV), with a stake valued at $ 45.1 million reported at the end of June. Lagging behind DE Shaw was Two Sigma Advisors, which raised a stake valued at $ 23.8 million. Arrowstreet Capital, Citadel Investment Group and Kensico Capital were also very fond of the stock, becoming one of the largest hedge fund holders in the company. In terms of the portfolio weights assigned to each position, Covalent Capital Partners assigned the greatest weight to Centennial Resource Development, Inc. (NASDAQ: CDEV), approximately 0.59% of its 13F portfolio. Kensico Capital is also relatively very bullish on the stock, allocating 0.39% of its 13F equity portfolio to CDEV.
Given that Centennial Resource Development, Inc. (NASDAQ: CDEV) has faced a drop in sentiment from hedge fund managers, logic dictates that there is a fund cult that has chosen to reduce their entire holdings. in the second trimester. At the top of the rankings, Robert Henry Lynch’s Aristeia Capital bid farewell to the biggest investment of the 750 funds tracked by Insider Monkey, totaling around $ 1.1 million in shares. Jonathan Soros’ fund, JS Capital, also sold his shares, worth around $ 0.9 million. These moves are intriguing to say the least, as total hedge fund interest was reduced by 1 fund in the second quarter.
Now let’s review hedge fund activity in other stocks – not necessarily in the same industry as Centennial Resource Development, Inc. (NASDAQ: CDEV) but of similar value. These stocks are Seacoast Banking Corporation of Florida (NASDAQ: SBCF), Banner Corporation (NASDAQ: BANR), SJW Corp. (NYSE: SJW), Methode Electronics Inc. (NYSE: MEI), Crestwood Equity Partners LP (NYSE: CEQP), Ping Identity Holding Corp. (NYSE: PING) and Euronav NV (NYSE: EURN). The market valuations of this group of stocks resemble the market valuation of CDEV.
[table] Ticker, number of HF with positions, total value of HF positions (x1000), change of HF position SBCF, 11.40467,2 BANR, 11.42049, -6 SJW, 7.60257, -2 MEI, 7.85144, -6 CEQP, 7.15756.2 PING, 23.784773.12 EURN, 17.100681.0 Average, 11.9.161304.0.3 [/table]
Check the table here if you have formatting issues.
As you can see, these stocks had an average of 11.9 hedge funds with bullish positions and the average amount invested in these stocks was $ 161 million. That figure was $ 153 million in the case of CDEV. Ping Identity Holding Corp. (NYSE: PING) is the most popular action in this table. On the other hand, SJW Corp. (NYSE: SJW) is the least popular with only 7 bullish hedge fund positions. Centennial Resource Development, Inc. (NASDAQ: CDEV) isn’t the most popular stock in this group, but hedge fund interest is still above average. Our overall hedge fund sentiment score for CDEV is 73.6. Stocks with a 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 the 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 24% in 2021 through October 22 and have consistently beaten the market by 1.6 percentage points. Hedge funds were also right to bet on CDEV, as the stock has returned 6.2% since the end of the second quarter (through 10/22) and has outperformed the market. Hedge funds have been rewarded for their relative optimism.
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Disclosure: none. This article originally appeared on Insider Monkey.