Forest Oil Corporation (FST): Insiders Aren’t Crazy About It But Hedge Funds Love It

To the average investor, there are plenty of indicators shareholders can use to track Mr. Market. A pair of the best are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top hedge fund managers can outperform their index-focused peers by a superb margin (see just how much).

Just as necessary, bullish insider trading activity is another way to analyze the investments you’re interested in. Obviously, there are many motivations for an upper level exec to get rid of shares of his or her company, but only one, very obvious reason why they would buy. Various academic studies have demonstrated the impressive potential of this strategy if piggybackers know what to do (learn more here).

Thus, let’s study the latest info surrounding Forest Oil Corporation (NYSE:FST).

How have hedgies been trading Forest Oil Corporation (NYSE:FST)?

In preparation for the third quarter, a total of 24 of the hedge funds we track were long in this stock, a change of 4% from one quarter earlier. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their stakes considerably.

Out of the hedge funds we follow, Steven Cohen’s SAC Capital Advisors had the most valuable position in Forest Oil Corporation (NYSE:FST), worth close to $41.2 million, accounting for 0.2% of its total 13F portfolio. Coming in second is Jeffrey Altman of Owl Creek Asset Management, with a $38.3 million position; 2% of its 13F portfolio is allocated to the company. Some other hedge funds with similar optimism include Don Morgan’s Brigade Capital, Greg Boland’s West Face Capital and Jim Simons’s Renaissance Technologies.

With a general bullishness amongst the titans, certain money managers were breaking ground themselves. SAC Capital Advisors, managed by Steven Cohen, established the biggest position in Forest Oil Corporation (NYSE:FST). SAC Capital Advisors had 41.2 million invested in the company at the end of the quarter. Jeffrey Altman’s Owl Creek Asset Management also made a $38.3 million investment in the stock during the quarter. The other funds with brand new FST positions are Don Morgan’s Brigade Capital, Greg Boland’s West Face Capital, and Jim Simons’s Renaissance Technologies.

Insider trading activity in Forest Oil Corporation (NYSE:FST)

Insider buying is best served when the primary stock in question has experienced transactions within the past half-year. Over the last six-month time period, Forest Oil Corporation (NYSE:FST) has seen zero unique insiders buying, and zero 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 Forest Oil Corporation (NYSE:FST). These stocks are Midstates Petroleum Company Inc (NYSE:MPO), Chesapeake Granite Wash Trust (NYSE:CHKR), Contango Oil & Gas Company (NYSEAMEX:MCF), Swift Energy Company (NYSE:SFY), and TransGlobe Energy Corporation (USA) (NASDAQ:TGA). All of these stocks are in the independent oil & gas industry and their market caps are similar to FST’s market cap.

Using the returns shown by our research, regular investors should always watch hedge fund and insider trading sentiment, and Forest Oil Corporation (NYSE:FST) is no exception.

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