Do Hedge Funds and Insiders Love Basic Energy Services, Inc (BAS)?

Is Basic Energy Services, Inc (NYSE:BAS) a buy here? Money managers are getting less bullish. The number of bullish hedge fund bets went down by 1 lately.

In the eyes of most investors, hedge funds are perceived as underperforming, outdated financial tools of the past. While there are more than 8000 funds with their doors open at present, we choose to focus on the bigwigs of this group, close to 450 funds. Most estimates calculate that this group has its hands on most of all hedge funds’ total capital, and by monitoring their best equity investments, we have brought to light a number of investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Equally as beneficial, optimistic insider trading sentiment is a second way to break down the marketplace. There are a number of motivations for a corporate insider to downsize shares of his or her company, but only one, very obvious reason why they would behave bullishly. Several academic studies have demonstrated the valuable potential of this strategy if “monkeys” understand what to do (learn more here).

Keeping this in mind, it’s important to take a gander at the recent action regarding Basic Energy Services, Inc (NYSE:BAS).

How have hedgies been trading Basic Energy Services, Inc (NYSE:BAS)?

In preparation for this quarter, a total of 9 of the hedge funds we track were bullish in this stock, a change of -10% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings considerably.

When looking at the hedgies we track, Millennium Management, managed by Israel Englander, holds the biggest position in Basic Energy Services, Inc (NYSE:BAS). Millennium Management has a $17 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Royce & Associates, managed by Chuck Royce, which held a $9.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds that are bullish include T Boone Pickens’s BP Capital, and Ken Griffin’s Citadel Investment Group.

Due to the fact that Basic Energy Services, Inc (NYSE:BAS) has witnessed declining sentiment from hedge fund managers, we can see that there lies a certain “tier” of money managers that elected to cut their positions entirely at the end of the first quarter. At the top of the heap, Jim Simons’s Renaissance Technologies dropped the biggest stake of the 450+ funds we monitor, worth an estimated $4.1 million in stock., and Israel Englander of Catapult Capital Management was right behind this move, as the fund dumped about $0.7 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 1 funds at the end of the first quarter.

How are insiders trading Basic Energy Services, Inc (NYSE:BAS)?

Bullish insider trading is at its handiest when the company we’re looking at has seen transactions within the past six months. Over the last six-month time frame, Basic Energy Services, Inc (NYSE:BAS) has experienced zero unique insiders buying, and 4 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Basic Energy Services, Inc (NYSE:BAS). These stocks are Synergy Resources Corp (NYSEAMEX:SYRG), TETRA Technologies, Inc. (NYSE:TTI), Newpark Resources Inc (NYSE:NR), Willbros Group Inc (NYSE:WG), and Tesco Corporation (USA) (NASDAQ:TESO). This group of stocks belong to the oil & gas equipment & services industry and their market caps are closest to BAS’s market cap.

With the returns demonstrated by the aforementioned tactics, retail investors must always pay attention to hedge fund and insider trading activity, and Basic Energy Services, Inc (NYSE:BAS) is no exception.

Click here to learn why you should track hedge funds