Here is What Hedge Funds Think About Western Refining, Inc. (WNR)

Is Western Refining, Inc. (NYSE:WNR) ready to rally soon? Investors who are in the know are in a bullish mood. The number of long hedge fund bets moved up by 5 in recent months.

According to most shareholders, hedge funds are viewed as worthless, outdated financial vehicles of yesteryear. While there are greater than 8000 funds with their doors open today, we look at the elite of this group, close to 450 funds. It is estimated that this group has its hands on the majority of all hedge funds’ total capital, and by monitoring their highest performing equity investments, we have determined a few investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Just as key, bullish insider trading sentiment is a second way to break down the investments you’re interested in. Just as you’d expect, there are a variety of stimuli for an executive to get rid of shares of his or her company, but only one, very obvious reason why they would behave bullishly. Plenty of empirical studies have demonstrated the useful potential of this tactic if shareholders know where to look (learn more here).

Now, we’re going to take a glance at the recent action encompassing Western Refining, Inc. (NYSE:WNR).

How are hedge funds trading Western Refining, Inc. (NYSE:WNR)?

At the end of the first quarter, a total of 25 of the hedge funds we track held long positions in this stock, a change of 25% from one quarter earlier. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their stakes substantially.

When looking at the hedgies we track, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in Western Refining, Inc. (NYSE:WNR). Renaissance Technologies has a $123.5 million position in the stock, comprising 0.3% of its 13F portfolio. Coming in second is Point State Capital, managed by Sean Cullinan, which held a $35.3 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Some other hedge funds with similar optimism include D. E. Shaw’s D E Shaw, Wayne Cooperman’s Cobalt Capital Management and Israel Englander’s Millennium Management.

As aggregate interest increased, key money managers were leading the bulls’ herd. Highbridge Capital Management, managed by Glenn Russell Dubin, established the most valuable position in Western Refining, Inc. (NYSE:WNR). Highbridge Capital Management had 9.5 million invested in the company at the end of the quarter. Christopher C. Grisanti’s Grisanti Brown & Partners also initiated a $6.5 million position during the quarter. The following funds were also among the new WNR investors: Richard Driehaus’s Driehaus Capital, Eric Sprott’s Sprott Asset Management, and David Costen Haley’s HBK Investments.

What have insiders been doing with Western Refining, Inc. (NYSE:WNR)?

Insider trading activity, especially when it’s bullish, is at its handiest when the company in question has seen transactions within the past six months. Over the last 180-day time period, Western Refining, Inc. (NYSE:WNR) has seen zero unique insiders buying, and 9 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Western Refining, Inc. (NYSE:WNR). These stocks are InterOil Corporation (USA) (NYSE:IOC), PBF Energy Inc (NYSE:PBF), Northern Tier Energy LP (NYSE:NTI), World Fuel Services Corporation (NYSE:INT), and Sinopec Shanghai Petrochemical Co. (ADR) (NYSE:SHI). This group of stocks belong to the oil & gas refining & marketing industry and their market caps are similar to WNR’s market cap.