Hedge Funds Have Never Been More Bullish On Equinor ASA (EQNR)

Abigail Fisher

Wed, Oct 9, 2019, 6:24 PM

Is Equinor ASA (NYSE:EQNR) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

Equinor ASA (NYSE:EQNR) has seen an increase in enthusiasm from smart money of late. Our calculations also showed that EQNR isn't among the 30 most popular stocks among hedge funds (see the video below).

Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

In today’s marketplace there are numerous metrics stock traders use to grade stocks. A duo of the most innovative metrics are hedge fund and insider trading moves. We have shown that, historically, those who follow the best picks of the elite fund managers can outclass the broader indices by a solid amount (see the details here).

Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let's take a glance at the key hedge fund action regarding Equinor ASA (NYSE:EQNR).

What have hedge funds been doing with Equinor ASA (NYSE:EQNR)?

At Q2's end, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 30% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards EQNR over the last 16 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Equinor ASA (NYSE:EQNR) was held by Renaissance Technologies, which reported holding $181.3 million worth of stock at the end of March. It was followed by Fisher Asset Management with a $43 million position. Other investors bullish on the company included Arrowstreet Capital, Citadel Investment Group, and Millennium Management.

As industrywide interest jumped, key money managers have been driving this bullishness. SIR Capital Management, managed by Vince Maddi and Shawn Brennan, initiated the biggest position in Equinor ASA (NYSE:EQNR). SIR Capital Management had $20.6 million invested in the company at the end of the quarter. D. E. Shaw's D E Shaw also made a $17.7 million investment in the stock during the quarter. The other funds with brand new EQNR positions are Dmitry Balyasny's Balyasny Asset Management, Mike Vranos's Ellington, and Paul Marshall and Ian Wace's Marshall Wace LLP.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Equinor ASA (NYSE:EQNR) but similarly valued. We will take a look at Celgene Corporation (NASDAQ:CELG), The Bank of Nova Scotia (NYSE:BNS), Duke Energy Corporation (NYSE:DUK), and T-Mobile US, Inc. (NASDAQ:TMUS). This group of stocks' market valuations are closest to EQNR's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CELG,88,10570280,-13 BNS,16,536678,2 DUK,32,1626108,6 TMUS,78,2625953,16 Average,53.5,3839755,2.75 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 53.5 hedge funds with bullish positions and the average amount invested in these stocks was $3840 million. That figure was $387 million in EQNR's case. Celgene Corporation (NASDAQ:CELG) is the most popular stock in this table. On the other hand The Bank of Nova Scotia (NYSE:BNS) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Equinor ASA (NYSE:EQNR) is even less popular than BNS. Hedge funds dodged a bullet by taking a bearish stance towards EQNR. Our calculations showed that the top 20 most popular hedge fund stocks returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately EQNR wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); EQNR investors were disappointed as the stock returned -2.7% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far in 2019.

Disclosure: None. This article was originally published at Insider Monkey.

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