Is C&J Energy Services Inc (CJES) Going to Burn These Hedge Funds?

To the average investor, there are plenty of indicators shareholders can use to monitor stocks. Some of the most useful are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top investment managers can outperform the broader indices by a solid margin (see just how much).

Just as necessary, optimistic insider trading activity is a second way to analyze the financial markets. There are plenty of reasons for a bullish insider to cut shares of his or her company, but only one, very obvious reason why they would buy. Several empirical studies have demonstrated the impressive potential of this method if you know where to look (learn more here).

What’s more, we’re going to examine the newest info for C&J Energy Services Inc (NYSE:CJES).

How have hedgies been trading C&J Energy Services Inc (NYSE:CJES)?

Heading into Q3, a total of 6 of the hedge funds we track were bullish in this stock, a change of -40% from the first quarter. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings significantly.

According to our 13F database, Nierenberg Investment Management, managed by David Nierenberg, holds the most valuable position in C&J Energy Services Inc (NYSE:CJES). Nierenberg Investment Management has a $19.4 million position in the stock, comprising 14.2% of its 13F portfolio. The second largest stake is held by Royce & Associates, managed by Chuck Royce, which held a $18.2 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Ken Griffin’s Citadel Investment Group, Arvind Sanger’s GeoSphere Capital Management and D. E. Shaw’s D E Shaw.

Judging by the fact that C&J Energy Services Inc (NYSE:CJES) has faced declining interest from the smart money’s best and brightest, we can see that there was a specific group of hedgies who sold off their full holdings last quarter. Intriguingly, George Soros’s Soros Fund Management dumped the largest investment of the 450+ funds we track, worth about $7.4 million in stock. Neil Chriss’s fund, Hutchin Hill Capital, also said goodbye to its stock, about $2.4 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 4 funds last quarter.

What have insiders been doing with C&J Energy Services Inc (NYSE:CJES)?

Legal insider trading, particularly when it’s bullish, is particularly usable when the primary stock in question has experienced transactions within the past six months. Over the latest six-month time frame, C&J Energy Services Inc (NYSE:CJES) has experienced zero unique insiders purchasing, 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 C&J Energy Services Inc (NYSE:CJES). These stocks are TETRA Technologies, Inc. (NYSE:TTI), Exterran Holdings, Inc. (NYSE:EXH), Hornbeck Offshore Services, Inc. (NYSE:HOS), GulfMark Offshore, Inc. (NYSE:GLF), and Exterran Partners, L.P. (NASDAQ:EXLP). All of these stocks are in the oil & gas equipment & services industry and their market caps match CJES’s market cap.