Is Diamond Offshore Drilling Inc (DO) Going to Burn These Hedge Funds?

Should Diamond Offshore Drilling Inc (NYSE:DO) investors track the following data?

In today’s marketplace, there are tons of gauges investors can use to analyze their holdings. A couple of the best are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite money managers can outclass the broader indices by a significant amount (see just how much).

Equally as key, bullish insider trading sentiment is a second way to look at the world of equities. Obviously, there are lots of stimuli for an executive to cut shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the impressive potential of this tactic if “monkeys” know what to do (learn more here).

Furthermore, let’s discuss the newest info surrounding Diamond Offshore Drilling Inc (NYSE:DO).

Hedge fund activity in Diamond Offshore Drilling Inc (NYSE:DO)

At Q2’s end, a total of 17 of the hedge funds we track were long in this stock, a change of 0% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were boosting their stakes meaningfully.

According to our 13F database, Renaissance Technologies, managed by Jim Simons, holds the largest position in Diamond Offshore Drilling Inc (NYSE:DO). Renaissance Technologies has a $188.1 million position in the stock, comprising 0.5% of its 13F portfolio. Coming in second is David Harding of Winton Capital Management, with a $33.4 million position; 0.4% of its 13F portfolio is allocated to the stock. Some other hedgies that hold long positions include D. E. Shaw’s D E Shaw, Cliff Asness’s AQR Capital Management and Steven Cohen’s SAC Capital Advisors.

Due to the fact Diamond Offshore Drilling Inc (NYSE:DO) has faced dropping sentiment from upper-tier hedge fund managers, it’s easy to see that there is a sect of hedge funds who were dropping their positions entirely last quarter. At the top of the heap, Israel Englander’s Millennium Management said goodbye to the biggest position of the 450+ funds we track, worth about $1.8 million in stock. Matthew Tewksbury’s fund, Stevens Capital Management, also dumped its stock, about $1.1 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

What have insiders been doing with Diamond Offshore Drilling Inc (NYSE:DO)?

Insider buying is particularly usable when the company we’re looking at has seen transactions within the past half-year. Over the latest six-month time frame, Diamond Offshore Drilling Inc (NYSE:DO) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators in other stocks similar to Diamond Offshore Drilling Inc (NYSE:DO). These stocks are ENSCO PLC (NYSE:ESV), Cheniere Energy, Inc. (NYSEAMEX:LNG), Markwest Energy Partners LP (NYSE:MWE), Concho Resources Inc. (NYSE:CXO), and Noble Corporation (NYSE:NE). This group of stocks belong to the oil & gas drilling & exploration industry and their market caps match DO’s market cap.