Hornbeck Offshore Services, Inc. (HOS): Insiders Aren’t Crazy About It

Hornbeck Offshore Services, Inc. (NYSE:HOS) shareholders have witnessed a decrease in support from the world’s most elite money managers of late.

According to most market participants, hedge funds are seen as underperforming, old financial vehicles of the past. While there are greater than 8000 funds with their doors open at present, we at Insider Monkey hone in on the crème de la crème of this club, about 450 funds. It is widely believed that this group oversees the majority of the hedge fund industry’s total capital, and by tracking their best picks, we have spotted 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 annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Just as important, bullish insider trading activity is a second way to parse down the world of equities. As the old adage goes: there are a variety of stimuli for a corporate insider to drop 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 useful potential of this method if piggybackers understand where to look (learn more here).

Consequently, let’s take a look at the recent action regarding Hornbeck Offshore Services, Inc. (NYSE:HOS).

Hedge fund activity in Hornbeck Offshore Services, Inc. (NYSE:HOS)

At Q1’s end, a total of 13 of the hedge funds we track were bullish in this stock, a change of -7% from the first quarter. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes significantly.

According to our comprehensive database, Fine Capital Partners, managed by Debra Fine, holds the largest position in Hornbeck Offshore Services, Inc. (NYSE:HOS). Fine Capital Partners has a $71.3 million position in the stock, comprising 7% of its 13F portfolio. Coming in second is Gilchrist Berg of Water Street Capital, with a $70.4 million position; 2.2% of its 13F portfolio is allocated to the company. Remaining peers that are bullish include William B. Gray’s Orbis Investment Management, Eric Bannasch’s Cadian Capital and Jim Simons’s Renaissance Technologies.

Seeing as Hornbeck Offshore Services, Inc. (NYSE:HOS) has witnessed declining sentiment from the entirety of the hedge funds we track, logic holds that there were a few fund managers that elected to cut their positions entirely in Q1. Intriguingly, SAC Subsidiary’s Sigma Capital Management dumped the largest investment of the “upper crust” of funds we monitor, comprising about $9.4 million in stock.. Arvind Sanger’s fund, GeoSphere Capital Management, also cut its stock, about $6 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds in Q1.

What do corporate executives and insiders think about Hornbeck Offshore Services, Inc. (NYSE:HOS)?

Insider buying is most useful when the company in question has seen transactions within the past half-year. Over the last six-month time frame, Hornbeck Offshore Services, Inc. (NYSE:HOS) has seen zero unique insiders purchasing, and 7 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Hornbeck Offshore Services, Inc. (NYSE:HOS). These stocks are C&J Energy Services Inc (NYSE:CJES), Exterran Partners, L.P. (NASDAQ:EXLP), Energy XXI (Bermuda) Limited (NASDAQ:EXXI), CARBO Ceramics Inc. (NYSE:CRR), and Exterran Holdings, Inc. (NYSE:EXH). All of these stocks are in the oil & gas equipment & services industry and their market caps are similar to HOS’s market cap.