Here is What Hedge Funds Think About CNOOC Limited (ADR) (CEO)

Is it smart to be bullish on CNOOC Limited (ADR) (NYSE:CEO)?

Now, according to many investors, hedge funds are viewed as bloated, outdated financial vehicles of an era lost to time. Although there are In excess of 8,000 hedge funds in operation currently, this site aim at the top tier of this club, close to 525 funds. Analysts calculate that this group controls most of the hedge fund industry’s total assets, and by paying attention to their highest performing equity investments, we’ve come up with a number of investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually 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, bullish insider trading sentiment is another way to analyze the investments you’re interested in. As the old adage goes: there are a variety of reasons for a corporate insider to sell shares of his or her company, but only one, very clear reason why they would behave bullishly. Various empirical studies have demonstrated the useful potential of this tactic if shareholders understand what to do (learn more here).

Now that that’s out of the way, it’s important to analyze the latest info about CNOOC Limited (ADR) (NYSE:CEO).

How are hedge funds trading CNOOC Limited (ADR) (NYSE:CEO)?

In preparation for the third quarter, a total of 11 of the hedge funds we track were bullish in this stock, a change of -21% from one quarter earlier. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes substantially.

According to our 13F database, Fisher Asset Management, managed by Ken Fisher, holds the most valuable position in CNOOC Limited (ADR) (NYSE:CEO). Fisher Asset Management has a $51.8 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, managed by Jim Simons, which held a $17.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Matthew Hulsizer’s PEAK6 Capital Management, Cliff Asness’s AQR Capital Management and David Dreman’s Dreman Value Management.

Judging by the fact that CNOOC Limited (ADR) (NYSE:CEO) has witnessed declining interest from the smart money’s best and brightest, we can see that there lies a certain “tier” of money managers that slashed their positions entirely at the end of the second quarter. Interestingly, Peter Rathjens Bruce Clarke and John Campbell’s Arrowstreet Capital dropped the biggest investment of the 450+ funds we monitor, worth close to $5.8 million in stock, and Israel Englander of Millennium Management was right behind this move, as the fund said goodbye to about $3.3 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 3 funds at the end of the second quarter.

How have insiders been trading CNOOC Limited (ADR) (NYSE:CEO)?

Insider buying made by high-level executives is at its handiest when the primary stock in question has experienced transactions within the past half-year. Over the last 180-day time period, CNOOC Limited (ADR) (NYSE:CEO) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to CNOOC Limited (ADR) (NYSE:CEO). These stocks are EOG Resources Inc (NYSE:EOG), Canadian Natural Resource Ltd (USA) (NYSE:CNQ), Anadarko Petroleum Corporation (NYSE:APC), Suncor Energy Inc. (USA) (NYSE:SU), and Enterprise Products Partners L.P. (NYSE:EPD). All of these stocks are in the independent oil & gas industry and their market caps are similar to CEO’s market cap.

Using the results explained by Insider Monkey’s research, average investors must always track hedge fund and insider trading sentiment, and CNOOC Limited (ADR) (NYSE:CEO) applies perfectly to this mantra.

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