Comstock Resources Inc (NYSE:CRK) investors should be aware of an increase in activity from the world’s largest hedge funds in recent months.
If you’d ask most investors, hedge funds are perceived as underperforming, old financial tools of yesteryear. While there are over 8000 funds in operation at present, we at Insider Monkey look at the elite of this group, about 450 funds. Most estimates calculate that this group oversees the majority of the smart money’s total asset base, and by paying attention to their highest performing equity investments, we have identified a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum 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 trumped the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Equally as beneficial, positive insider trading activity is another way to parse down the world of equities. Just as you’d expect, there are a variety of reasons for a corporate insider to get rid of shares of his or her company, but only one, very clear reason why they would behave bullishly. Many academic studies have demonstrated the impressive potential of this strategy if “monkeys” know where to look (learn more here).
Consequently, we’re going to take a peek at the latest action encompassing Comstock Resources Inc (NYSE:CRK).
Hedge fund activity in Comstock Resources Inc (NYSE:CRK)
In preparation for this year, a total of 8 of the hedge funds we track held long positions in this stock, a change of 14% from one quarter earlier. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes substantially.
When looking at the hedgies we track, Ken Griffin’s Citadel Investment Group had the most valuable position in Comstock Resources Inc (NYSE:CRK), worth close to $23 million, accounting for 0% of its total 13F portfolio. Coming in second is Israel Englander of Millennium Management, with a $8 million position; 0.4% of its 13F portfolio is allocated to the company. Some other hedgies that hold long positions include James Dondero’s Highland Capital Management, Jim Simons’s Renaissance Technologies and Mike Vranos’s Ellington.
As aggregate interest increased, key money managers were breaking ground themselves. Highland Capital Management, managed by James Dondero, initiated the biggest position in Comstock Resources Inc (NYSE:CRK). Highland Capital Management had 4 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also made a $1 million investment in the stock during the quarter. The only other fund with a brand new CRK position is Andrew R. Midler’s Savitr Capital.
What have insiders been doing with Comstock Resources Inc (NYSE:CRK)?
Bullish insider trading is particularly usable when the company in focus has experienced transactions within the past 180 days. Over the last half-year time period, Comstock Resources Inc (NYSE:CRK) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Comstock Resources Inc (NYSE:CRK). These stocks are Sanchez Energy Corp (NYSE:SN), San Juan Basin Royalty Trust (NYSE:SJT), Resolute Energy Corp (NYSE:REN), Delek Logistics Partners LP (NYSE:DKL), and Memorial Production Partners LP (NASDAQ:MEMP). This group of stocks are in the independent oil & gas industry and their market caps are similar to CRK’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Sanchez Energy Corp (NYSE:SN) | 7 | 1 | 3 |
| San Juan Basin Royalty Trust (NYSE:SJT) | 5 | 0 | 0 |
| Resolute Energy Corp (NYSE:REN) | 12 | 0 | 3 |
| Delek Logistics Partners LP (NYSE:DKL) | 1 | 9 | 0 |
| Memorial Production Partners LP (NASDAQ:MEMP) | 1 | 0 | 0 |
With the returns demonstrated by Insider Monkey’s tactics, everyday investors should always keep an eye on hedge fund and insider trading sentiment, and Comstock Resources Inc (NYSE:CRK) shareholders fit into this picture quite nicely.
