Occidental Petroleum Corporation (NYSE:OXY) is up a modest 12% in 2013, and is considered a key player in the natural gas and NGL market, specifically in shale. With hedge funds appearing to become more bullish on domestic energy in general last quarter, a number of them were increasing their bets on Occidental.
To many market players, hedge funds are seen as delayed, outdated investment vehicles of a period lost to current times. Although there are over 8,000 hedge funds with their doors open currently, this site looks at the upper echelon of this club, about 525 funds. It is widely held that this group controls the majority of the hedge fund industry’s total assets, and by watching their best investments, we’ve identified a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a 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 trumped the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Equally as key, positive insider trading sentiment is another way to look at the world of equities. As the old adage goes: there are a variety of reasons for a corporate insider to cut shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Many academic studies have demonstrated the useful potential of this strategy if investors know what to do (learn more here).
Thus, we’re going to discuss the recent info about Occidental Petroleum Corporation (NYSE:OXY).
How have hedgies been trading Occidental Petroleum Corporation (NYSE:OXY)?
In preparation for the third quarter, a total of 63 of the hedge funds we track were bullish in this stock, a change of 15% from the first quarter. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were upping their stakes meaningfully.
When using filings from the hedgies we track, Ric Dillon’s Diamond Hill Capital had the largest position in Occidental Petroleum Corporation (NYSE:OXY), worth close to $275.4 million, accounting for 3% of its total 13F portfolio. The second largest stake is held by First Pacific Advisors LLC, managed by Robert Rodriguez and Steven Romick, which held a $268.8 million position; 2.9% of its 13F portfolio is allocated to the company. Some other hedge funds that are bullish include David Cohen and Harold Levy’s Iridian Asset Management, Matt McLennan’s First Eagle Investment Management and Charles de Vaulx’s International Value Advisers.
As industrywide interest increased, particular hedge funds were breaking ground themselves. Diamond Hill Capital, managed by Ric Dillon, initiated the most valuable position in Occidental Petroleum Corporation (NYSE:OXY). Diamond Hill Capital had 275.4 million invested in the company at the end of the quarter. Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC also made a $268.8 million investment in the stock during the quarter. The other funds with brand new OXY positions are David Cohen and Harold Levy’s Iridian Asset Management, Matt McLennan’s First Eagle Investment Management, and Charles de Vaulx’s International Value Advisers.
Insider trading activity in Occidental Petroleum Corporation (NYSE:OXY)
Legal insider trading, particularly when it’s bullish, is at its handiest when the primary stock in question has seen transactions within the past half-year. Over the last half-year time period, Occidental Petroleum Corporation (NYSE:OXY) has seen 1 unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
We’ll also take a look at the relationship between both of these indicators in other stocks similar to Occidental Petroleum Corporation (NYSE:OXY). These stocks are Ecopetrol S.A. (ADR) (NYSE:EC), China Petroleum & Chemical Corp (ADR) (NYSE:SNP), Eni SpA (ADR) (NYSE:E), Statoil ASA (ADR) (NYSE:STO), and ConocoPhillips (NYSE:COP). This group of stocks are in the major integrated oil & gas industry and their market caps resemble OXY’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Ecopetrol S.A. (ADR) (NYSE:EC) | 4 | 0 | 0 |
| China Petroleum & Chemical Corp (ADR) (NYSE:SNP) | 9 | 0 | 0 |
| Eni SpA (ADR) (NYSE:E) | 9 | 0 | 0 |
| Statoil ASA (ADR) (NYSE:STO) | 13 | 0 | 0 |
| ConocoPhillips (NYSE:COP) | 45 | 0 | 0 |
Using the results explained by our strategies, average investors must always keep one eye on hedge fund and insider trading sentiment, and Occidental Petroleum Corporation (NYSE:OXY) is an important part of this process.
