Atwood Oceanics, Inc. (ATW): Are Hedge Funds Right About This Stock?

Atwood Oceanics, Inc. (NYSE:ATW) was in 14 hedge funds’ portfolio at the end of the first quarter of 2013. ATW shareholders have witnessed an increase in support from the world’s most elite money managers of late. There were 12 hedge funds in our database with ATW holdings at the end of the previous quarter.

According to most investors, hedge funds are assumed to be slow, old investment tools of the past. While there are greater than 8000 funds trading at the moment, we look at the masters of this group, around 450 funds. Most estimates calculate that this group controls the majority of the smart money’s total capital, and by monitoring their best investments, we have spotted a number of investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

Just as key, bullish insider trading activity is another way to break down the world of equities. There are lots of motivations for a bullish insider to cut shares of his or her company, but only one, very clear reason why they would behave bullishly. Various empirical studies have demonstrated the valuable potential of this strategy if investors know where to look (learn more here).

With all of this in mind, we’re going to take a gander at the key action surrounding Atwood Oceanics, Inc. (NYSE:ATW).

How have hedgies been trading Atwood Oceanics, Inc. (NYSE:ATW)?

Heading into Q2, a total of 14 of the hedge funds we track were bullish in this stock, a change of 17% from the previous quarter. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were boosting their stakes meaningfully.

When looking at the hedgies we track, Dreman Value Management, managed by David Dreman, holds the largest position in Atwood Oceanics, Inc. (NYSE:ATW). Dreman Value Management has a $37.4 million position in the stock, comprising 1% of its 13F portfolio. Sitting at the No. 2 spot is First Pacific Advisors LLC, managed by Robert Rodriguez and Steven Romick, which held a $30.3 million position; 0.3% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include Jim Simons’s Renaissance Technologies, and Greg Poole’s Echo Street Capital Management.

Consequently, some big names were breaking ground themselves. First Pacific Advisors LLC, managed by Robert Rodriguez and Steven Romick, assembled the most valuable position in Atwood Oceanics, Inc. (NYSE:ATW). First Pacific Advisors LLC had 30.3 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $11.8 million investment in the stock during the quarter. The other funds with brand new ATW positions are Richard Driehaus’s Driehaus Capital, D. E. Shaw’s D E Shaw, and Paul Tudor Jones’s Tudor Investment Corp.

Insider trading activity in Atwood Oceanics, Inc. (NYSE:ATW)

Bullish insider trading is at its handiest when the primary stock in question has experienced transactions within the past half-year. Over the latest half-year time period, Atwood Oceanics, Inc. (NYSE:ATW) has seen zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Atwood Oceanics, Inc. (NYSE:ATW). These stocks are Pengrowth Energy Corp (USA) (NYSE:PGH), Rowan Companies PLC (NYSE:RDC), Halcon Resources Corp (NYSE:HK), Enerplus Corp (USA) (NYSE:ERF), and Patterson-UTI Energy, Inc. (NASDAQ:PTEN). All of these stocks are in the oil & gas drilling & exploration industry and their market caps are closest to ATW’s market cap.

With the returns demonstrated by our tactics, everyday investors should always watch hedge fund and insider trading sentiment, and Atwood Oceanics, Inc. (NYSE:ATW) shareholders fit into this picture quite nicely.

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