Hedge Funds Are Selling Rowan Companies PLC (RDC)

In today’s marketplace, there are a multitude of gauges shareholders can use to monitor their holdings. A duo of the most innovative are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top fund managers can trounce their index-focused peers by a healthy amount (see just how much).

Just as useful, positive insider trading sentiment is another way to analyze the stock market universe. As the old adage goes: there are plenty of stimuli for a corporate insider to downsize shares of his or her company, but just one, very clear reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the useful potential of this tactic if investors know what to do (learn more here).

Now that that’s out of the way, it’s important to examine the latest info about Rowan Companies PLC (NYSE:RDC).

Hedge fund activity in Rowan Companies PLC (NYSE:RDC)

In preparation for the third quarter, a total of 25 of the hedge funds we track held long positions in this stock, a change of -7% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their holdings meaningfully.

According to our 13F database, First Pacific Advisors LLC, managed by Robert Rodriguez and Steven Romick, holds the most valuable position in Rowan Companies PLC (NYSE:RDC). First Pacific Advisors LLC has a $227.6 million position in the stock, comprising 2.4% of its 13F portfolio. The second largest stake is held by Citadel Investment Group, managed by Ken Griffin, which held a $104.9 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include Israel Englander’s Millennium Management, Daniel Gold’s QVT Financial and Phill Gross and Robert Atchinson’s Adage Capital Management.

Due to the fact Rowan Companies PLC (NYSE:RDC) has witnessed declining interest from the top-tier hedge fund industry, it’s safe to say that there were a few hedgies that slashed their full holdings last quarter. Interestingly, Mark Kingdon’s Kingdon Capital dropped the biggest stake of the “upper crust” of funds we key on, totaling about $11.5 million in stock, and Louis Bacon of Moore Global Investments was right behind this move, as the fund said goodbye to about $5.3 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 2 funds last quarter.

What have insiders been doing with Rowan Companies PLC (NYSE:RDC)?

Bullish insider trading is most useful when the company in focus has experienced transactions within the past 180 days. Over the latest six-month time frame, Rowan Companies PLC (NYSE:RDC) has seen zero unique insiders purchasing, 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 Rowan Companies PLC (NYSE:RDC). These stocks are QEP Resources Inc (NYSE:QEP), Atwood Oceanics, Inc. (NYSE:ATW), Patterson-UTI Energy, Inc. (NASDAQ:PTEN), Penn West Petroleum Ltd (USA) (NYSE:PWE), and Nabors Industries Ltd. (NYSE:NBR). This group of stocks are in the oil & gas drilling & exploration industry and their market caps match RDC’s market cap.