Hedge Funds Are Betting On Precision Drilling Corp (USA) (PDS)

Precision Drilling Corp (USA) (NYSE:PDS) was in 13 hedge funds’ portfolio at the end of December. PDS investors should pay attention to an increase in hedge fund sentiment in recent months. There were 11 hedge funds in our database with PDS positions at the end of the previous quarter.

At the moment, there are plenty of gauges market participants can use to watch Mr. Market. Some of the best are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite hedge fund managers can beat the broader indices by a very impressive amount (see just how much).

Just as key, bullish insider trading sentiment is another way to parse down the investments you’re interested in. Obviously, there are a variety of incentives for a corporate insider to downsize shares of his or her company, but just one, very obvious reason why they would behave bullishly. Various empirical studies have demonstrated the useful potential of this strategy if investors know what to do (learn more here).

With these “truths” under our belt, we’re going to take a look at the key action surrounding Precision Drilling Corp (USA) (NYSE:PDS).

Hedge fund activity in Precision Drilling Corp (USA) (NYSE:PDS)

At year’s end, a total of 13 of the hedge funds we track held long positions in this stock, a change of 18% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were upping their stakes considerably.

When looking at the hedgies we track, Tetrem Capital Management, managed by Daniel Bubis, holds the largest position in Precision Drilling Corp (USA) (NYSE:PDS). Tetrem Capital Management has a $57 million position in the stock, comprising 1.7% of its 13F portfolio. On Tetrem Capital Management’s heels is Third Avenue Management, managed by Martin Whitman, which held a $27.3 million position; 0.6% of its 13F portfolio is allocated to the stock. Remaining hedgies with similar optimism include Steven Cohen’s SAC Capital Advisors, Israel Englander’s Millennium Management and Chuck Royce’s Royce & Associates.

Consequently, some big names were breaking ground themselves. SAC Capital Advisors, managed by Steven Cohen, established the most valuable position in Precision Drilling Corp (USA) (NYSE:PDS). SAC Capital Advisors had 9 million invested in the company at the end of the quarter. Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners also initiated a $3.4 million position during the quarter. The other funds with new positions in the stock are SAC Subsidiary’s CR Intrinsic Investors, John Overdeck and David Siegel’s Two Sigma Advisors, and D. E. Shaw’s D E Shaw.

Insider trading activity in Precision Drilling Corp (USA) (NYSE:PDS)

Insider trading activity, especially when it’s bullish, is at its handiest when the company in question has seen transactions within the past half-year. Over the latest six-month time frame, Precision Drilling Corp (USA) (NYSE:PDS) has experienced 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 Precision Drilling Corp (USA) (NYSE:PDS). These stocks are CARBO Ceramics Inc. (NYSE:CRR), Energy XXI (Bermuda) Limited (NASDAQ:EXXI), Lufkin Industries, Inc. (NASDAQ:LUFK), Helix Energy Solutions Group Inc. (NYSE:HLX), and Forum Energy Technologies Inc (NYSE:FET). This group of stocks are the members of the oil & gas equipment & services industry and their market caps match PDS’s market cap.

With the results shown by our time-tested strategies, retail investors should always keep an eye on hedge fund and insider trading sentiment, and Precision Drilling Corp (USA) (NYSE:PDS) applies perfectly to this mantra.

Click here to learn why you should track hedge funds