Peabody Energy Corporation (NYSE:BTU) is a favorite of many energy-focused investors, but some data suggests you might be best taking your profits.
Now, according to many market players, hedge funds are viewed as useless, old financial tools of a period lost to current times. Although there are In excess of 8,000 hedge funds with their doors open today, this site looks at the elite of this club, close to 525 funds. It is widely held that this group oversees most of the hedge fund industry’s total capital, and by keeping an eye on their highest performing equity investments, we’ve come up with a number of investment strategies that have historically outpaced the broader indices. 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 began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 33 percentage points in 11 months (find the details here).
Equally as necessary, positive insider trading sentiment is a second way to look at the marketplace. Obviously, there are lots of stimuli for a corporate insider to cut shares of his or her company, but just one, very clear reason why they would initiate a purchase. Many empirical studies have demonstrated the valuable potential of this tactic if piggybackers understand where to look (learn more here).
What’s more, we’re going to discuss the latest info for Peabody Energy Corporation (NYSE:BTU).
How have hedgies been trading Peabody Energy Corporation (NYSE:BTU)?
In preparation for the third quarter, a total of 31 of the hedge funds we track held long positions in this stock, a change of -11% from the first quarter. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their stakes substantially.
As Peabody Energy Corporation (NYSE:BTU) has witnessed bearish sentiment from upper-tier hedge fund managers, logic holds that there is a sect of money managers who were dropping their positions entirely heading into Q2. It’s worth mentioning that Richard Perry’s Perry Capital dropped the biggest investment of the “upper crust” of funds we track, comprising close to $66.9 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also dumped its stock, about $50.3 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 4 funds heading into Q2.
Insider trading activity in Peabody Energy Corporation (NYSE:BTU)
Legal insider trading, particularly when it’s bullish, is particularly usable when the company in focus has experienced transactions within the past half-year. Over the last six-month time period, Peabody Energy Corporation (NYSE:BTU) has seen zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
We’ll check out the relationship between both of these indicators in other stocks similar to Peabody Energy Corporation (NYSE:BTU). These stocks are Cameco Corporation (USA) (NYSE:CCJ), CONSOL Energy Inc. (NYSE:CNX), Yanzhou Coal Mining Co Ltd (ADR) (NYSE:YZC), Central Fund of Canada Limited (USA) (NYSEAMEX:CEF), and Turquoise Hill Resources Ltd (NYSE:TRQ). This group of stocks belong to the industrial metals & minerals industry and their market caps are closest to BTU’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Cameco Corporation (USA) (NYSE:CCJ) | 12 | 0 | 0 |
| CONSOL Energy Inc. (NYSE:CNX) | 25 | 0 | 1 |
| Yanzhou Coal Mining Co Ltd (ADR) (NYSE:YZC) | 5 | 0 | 0 |
| Central Fund of Canada Limited (USA) (NYSEAMEX:CEF) | 5 | 0 | 0 |
| Turquoise Hill Resources Ltd (NYSE:TRQ) | 19 | 0 | 0 |
Using the returns shown by the previously mentioned tactics, regular investors should always watch hedge fund and insider trading activity, and Peabody Energy Corporation (NYSE:BTU) is an important part of this process.
