Hedge Funds Are Crazy About Occidental Petroleum Corporation (OXY)

Is Occidental Petroleum Corporation (NYSE:OXY) an exceptional investment today? Investors who are in the know are taking an optimistic view. The number of bullish hedge fund positions rose by 3 recently.

If you’d ask most traders, hedge funds are viewed as slow, outdated investment vehicles of yesteryear. While there are more than 8000 funds with their doors open at the moment, we at Insider Monkey hone in on the aristocrats of this group, close to 450 funds. Most estimates calculate that this group oversees most of the hedge fund industry’s total capital, and by tracking their highest performing picks, we have formulated a number of 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 outperformed the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Just as integral, optimistic insider trading sentiment is a second way to break down the investments you’re interested in. Just as you’d expect, there are lots of incentives for an insider to downsize shares of his or her company, but just one, very simple reason why they would behave bullishly. Plenty of empirical studies have demonstrated the valuable potential of this tactic if “monkeys” know what to do (learn more here).

Consequently, we’re going to take a look at the recent action surrounding Occidental Petroleum Corporation (NYSE:OXY).

Hedge fund activity in Occidental Petroleum Corporation (NYSE:OXY)

Heading into Q2, a total of 55 of the hedge funds we track were long in this stock, a change of 6% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably.

Of the funds we track, D. E. Shaw’s D E Shaw had the most valuable position in Occidental Petroleum Corporation (NYSE:OXY), worth close to $356.8 million, accounting for 0.9% of its total 13F portfolio. On D E Shaw’s heels is Diamond Hill Capital, managed by Ric Dillon, which held a $259.5 million position; 2.7% 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, Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC and Jim Simons’s Renaissance Technologies.

As one would reasonably expect, some big names have been driving this bullishness. First Pacific Advisors LLC, managed by Robert Rodriguez and Steven Romick, created the most valuable position in Occidental Petroleum Corporation (NYSE:OXY). First Pacific Advisors LLC had 165.1 million invested in the company at the end of the quarter. Leon Cooperman’s Omega Advisors also initiated a $76.6 million position during the quarter. The following funds were also among the new OXY investors: Keith Meister’s Corvex Capital, Charles Davidson’s Wexford Capital, and Christopher Medlock James’s Partner Fund Management.

How are insiders trading Occidental Petroleum Corporation (NYSE:OXY)?

Insider trading activity, especially when it’s bullish, is at its handiest when the primary stock in question has seen transactions within the past six months. Over the last 180-day time frame, Occidental Petroleum Corporation (NYSE:OXY) has seen 1 unique insiders buying, 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 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 the members of the major integrated oil & gas industry and their market caps match OXY’s market cap.

With the returns shown by our tactics, retail investors must always pay attention to hedge fund and insider trading sentiment, and Occidental Petroleum Corporation (NYSE:OXY) is no exception.

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