With the series of first quarter 13F deposits behind us, it’s time to take a look at which stocks some of the world’s top fund managers preferred to invest or sell before Q2 2021. One of those stocks was Torchlight Energy Resources, Inc. (NASDAQ: TRCH).
East Torchlight Energy Resources, Inc. (NASDAQ: TRCH) soon ready to rally? Leading investors are betting on the stock. The number of long positions in hedge funds has increased by 3 lately. Torchlight Energy Resources, Inc. (NASDAQ: TRCH) was listed in 4 hedge fund portfolios at the end of March. The all-time high for this statistic is 1. This means that the bullish number of hedge fund positions in this stock is currently at its highest level. Our calculations also showed that TRCH is not among the top 30 most popular stocks among hedge funds (click for Q1 rank).
So why do we pay attention to hedge fund sentiment before making investment decisions? Our research has shown that small cap hedge fund stock selection managed to beat the market by double digits every year between 1999 and 2016, but the margin for outperformance has shrunk in recent years. Nonetheless, we were still able to identify in advance a select group of hedge funds that have outperformed S&P 500 ETFs by more than 115 percentage points since March 2017 (see details here). We have been able to outperform passive index funds by tracking corporate and hedge fund insider movements, and we believe small investors can benefit greatly from reading hedge fund investor letters and records. 13F.
Thomas Claugus of GMT Capital
At Insider Monkey, we scour multiple sources to uncover the next big investing idea. For example, an activist hedge fund wants to buy this $ 28 biotech share for $ 50. We therefore recommended a long position to our monthly premium newsletter subscribers. We’re going through lists like the top 10 battery stocks to pick the next Tesla that will deliver 10x performance. Even though we only recommend positions in a tiny fraction of the companies we analyze, we check as many stocks as possible. We read letters from hedge fund investors and listen to equity pitches at hedge fund conferences. You can sign up for our free daily newsletter on our homepage. With that in mind, let’s take a look at new hedge fund action on Torchlight Energy Resources, Inc. (NASDAQ: TRCH).
Do hedge funds think TRCH is a good stock to buy now?
At the end of the first quarter, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 300% from the fourth quarter of 2020. Below, you can see the development of sentiment for hedge funds owed to TRCH for the past 23 quarters. With smart money positions experiencing their usual ebb and flow, there is a “next level” of notable hedge fund managers who were drastically increasing their stakes (or already accumulating large positions).
Among the funds tracked by Insider Monkey, GMT Capital, managed by Thomas E. Claugus, holds the largest position in Torchlight Energy Resources, Inc. (NASDAQ: TRCH). GMT Capital holds a position of $ 2 million in the stock, comprising 0.1% of its 13F portfolio. The second most optimistic fund manager is Citadel Investment Group, managed by Ken Griffin, which has a position of $ 0.8 million; the fund has less than 0.1 %% of its 13F portfolio invested in the stock. Other professional fund managers with similar optimism include Millennium Management from Israel Englander, Ben Levine, Andrew Manuel and LMR Partners and Stefan Renold. In terms of the portfolio weights assigned to each position, GMT Capital assigned the largest weight to Torchlight Energy Resources, Inc. (NASDAQ: TRCH), around 0.15% of its 13F portfolio. LMR Partners is also relatively very bullish on the stock, designating 0.0032% of its 13F equity portfolio at TRCH.
As one might reasonably expect, key fund managers led the herd of bulls. GMT Capital, managed by Thomas E. Claugus, established the most valuable position in Torchlight Energy Resources, Inc. (NASDAQ: TRCH). GMT Capital had invested $ 2 million in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $ 0.8 million position during the quarter. The only other fund with a brand new TRCH position is Stefan Renold’s Ben Levine, Andrew Manuel and LMR Partners.
Let’s take a look at the activity of hedge funds in other stocks similar to Torchlight Energy Resources, Inc. (NASDAQ: TRCH). These stocks are eMagin Corporation (NYSE: EMAN), PCSB Financial Corporation (NASDAQ: PCSB), Tricida, Inc. (NASDAQ: TCDA), Kura Sushi USA, Inc. (NASDAQ: KRUS), Capital Bancorp, Inc. (NASDAQ: CBNK), CNFinance Holdings Limited (NYSE: CNF) and Ovid Therapeutics Inc. (NASDAQ: OVID). The market capitalizations of this group of stocks resemble the market capitalization of TRCH.
[table] Ticker, number of HF with positions, total value of HF positions (x1000), change of HF position EMAN, 9.5985.4 PCSB, 8.19362.0 TCDA, 20.105622.1 KRUS, 5.22524, -1 CBNK, 36770.1 CNF, 2.148.2 OVID, 14.72077, -2 Medium, 8.7.33213,0.7 [/table]
Check the table here if you have formatting issues.
As you can see, these stocks had an average of 8.7 hedge funds with bullish positions and the average amount invested in these stocks was $ 33 million. This figure was $ 3 million in the case of TRCH. Tricida, Inc. (NASDAQ: TCDA) is the most popular stock in this table. On the other hand, CNFinance Holdings Limited (NYSE: CNF) is the least popular with only 2 bullish hedge fund positions. Torchlight Energy Resources, Inc. (NASDAQ: TRCH) isn’t the least popular stock in this group, but hedge fund interest is still below average. Our overall hedge fund sentiment score for TRCH is 43.6. 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 17.2% in 2021 through June 11 and have consistently beat the market by 3.3 percentage points. A small number of hedge funds were also right to bet on the TRCH, as the stock has returned 70.5% since the end of the first quarter (through 6/11) and outperformed the market by an even larger margin. .
Disclosure: none. This article originally appeared on Insider Monkey.