In the 21st century investor’s toolkit, there are a multitude of gauges shareholders can use to analyze publicly traded companies. A pair of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best investment managers can beat their index-focused peers by a superb margin (see just how much).
Just as integral, positive insider trading activity is another way to break down the investments you’re interested in. There are plenty of incentives for an insider to cut shares of his or her company, but just one, very clear reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the valuable potential of this method if “monkeys” understand where to look (learn more here).
Now, it’s important to take a peek at the recent action surrounding Pacific Drilling SA (NYSE:PACD).
How have hedgies been trading Pacific Drilling SA (NYSE:PACD)?
In preparation for this year, a total of 10 of the hedge funds we track were long in this stock, a change of 11% from the third quarter. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes significantly.
Of the funds we track, Eric Mindich’s Eton Park Capital had the most valuable position in Pacific Drilling SA (NYSE:PACD), worth close to $34.6 million, comprising 0.7% of its total 13F portfolio. Sitting at the No. 2 spot is HBK Investments, managed by David Costen Haley, which held a $28.3 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Other peers that hold long positions include James Dinan’s York Capital Management, Ken Griffin’s Citadel Investment Group and Israel Englander’s Millennium Management.
Consequently, specific money managers have jumped into Pacific Drilling SA (NYSE:PACD) headfirst. Magnetar Capital, managed by Alec Litowitz and Ross Laser, initiated the largest position in Pacific Drilling SA (NYSE:PACD). Magnetar Capital had 6.6 million invested in the company at the end of the quarter. Charles Davidson’s Wexford Capital also initiated a $1 million position during the quarter. The only other fund with a brand new PACD position is Neil Chriss’s Hutchin Hill Capital.
What have insiders been doing with Pacific Drilling SA (NYSE:PACD)?
Insider purchases made by high-level executives is at its handiest when the company we’re looking at has experienced transactions within the past 180 days. Over the latest 180-day time frame, Pacific Drilling SA (NYSE:PACD) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Pacific Drilling SA (NYSE:PACD). These stocks are Kodiak Oil & Gas Corp (USA) (NYSE:KOG), BreitBurn Energy Partners L.P. (NASDAQ:BBEP), EV Energy Partners, L.P. (NASDAQ:EVEP), Ocean Rig UDW Inc (NASDAQ:ORIG), and Unit Corporation (NYSE:UNT). This group of stocks are the members of the oil & gas drilling & exploration industry and their market caps are closest to PACD’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Kodiak Oil & Gas Corp (USA) (NYSE:KOG) | 17 | 0 | 6 |
| BreitBurn Energy Partners L.P. (NASDAQ:BBEP) | 5 | 0 | 3 |
| EV Energy Partners, L.P. (NASDAQ:EVEP) | 3 | 0 | 0 |
| Ocean Rig UDW Inc (NASDAQ:ORIG) | 5 | 0 | 0 |
| Unit Corporation (NYSE:UNT) | 9 | 0 | 5 |
With the returns exhibited by our research, everyday investors must always pay attention to hedge fund and insider trading activity, and Pacific Drilling SA (NYSE:PACD) applies perfectly to this mantra.
