Here is What Hedge Funds Think About Kosmos Energy Ltd (KOS)

Kosmos Energy Ltd (NYSE:KOS) was in 7 hedge funds’ portfolio at the end of December. KOS has seen a decrease in hedge fund sentiment in recent months. There were 7 hedge funds in our database with KOS positions at the end of the previous quarter.

To most shareholders, hedge funds are seen as unimportant, old investment tools of years past. While there are greater than 8000 funds with their doors open at present, we at Insider Monkey choose to focus on the bigwigs of this group, about 450 funds. Most estimates calculate that this group has its hands on most of the smart money’s total capital, and by keeping an eye on their top investments, we have figured out a number of investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy beat 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 outpaced the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).

Equally as beneficial, bullish insider trading sentiment is a second way to parse down the marketplace. Obviously, there are a number of stimuli for an upper level exec to cut shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Plenty of academic studies have demonstrated the market-beating potential of this strategy if you know what to do (learn more here).

Now, it’s important to take a peek at the recent action surrounding Kosmos Energy Ltd (NYSE:KOS).

How are hedge funds trading Kosmos Energy Ltd (NYSE:KOS)?

In preparation for this year, a total of 7 of the hedge funds we track were long in this stock, a change of 0% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their holdings significantly.

When looking at the hedgies we track, Israel Englander’s Millennium Management had the biggest position in Kosmos Energy Ltd (NYSE:KOS), worth close to $9.4 million, accounting for 0.1% of its total 13F portfolio. The second largest stake is held by SAC Capital Advisors, managed by Steven Cohen, which held a $9.2 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other hedgies that hold long positions include Ken Griffin’s Citadel Investment Group, Mark Kingdon’s Kingdon Capital and D. E. Shaw’s D E Shaw.

Since Kosmos Energy Ltd (NYSE:KOS) has witnessed bearish sentiment from the aggregate hedge fund industry, we can see that there was a specific group of funds who sold off their entire stakes heading into 2013. At the top of the heap, SAC Subsidiary’s Sigma Capital Management said goodbye to the largest stake of all the hedgies we key on, valued at an estimated $1.4 million in stock.. Jim Simons’s fund, Renaissance Technologies, also sold off its stock, about $0.2 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Insider trading activity in Kosmos Energy Ltd (NYSE:KOS)

Insider purchases made by high-level executives is most useful when the company in question has experienced transactions within the past half-year. Over the latest half-year time frame, Kosmos Energy Ltd (NYSE:KOS) has experienced 1 unique insiders buying, and 10 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Kosmos Energy Ltd (NYSE:KOS). These stocks are Oasis Petroleum Inc. (NYSE:OAS), Baytex Energy Corp (USA) (NYSE:BTE), Energen Corporation (NYSE:EGN), National Fuel Gas Co. (NYSE:NFG), and SM Energy Co. (NYSE:SM). This group of stocks belong to the independent oil & gas industry and their market caps match KOS’s market cap.

With the results demonstrated by our time-tested strategies, everyday investors should always watch hedge fund and insider trading sentiment, and Kosmos Energy Ltd (NYSE:KOS) shareholders fit into this picture quite nicely.

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