Oasis Petroleum Inc. (OAS): Are Hedge Funds Right About This Stock?

Oasis Petroleum Inc. (NYSE:OAS) was in 22 hedge funds’ portfolio at the end of March. OAS has seen an increase in activity from the world’s largest hedge funds recently. There were 18 hedge funds in our database with OAS holdings at the end of the previous quarter.

In the eyes of most market participants, hedge funds are seen as unimportant, outdated financial tools of years past. While there are greater than 8000 funds in operation at the moment, we at Insider Monkey choose to focus on the bigwigs of this club, about 450 funds. It is widely believed that this group controls the lion’s share of all hedge funds’ total capital, and by paying attention to their top equity investments, we have come up with a number of investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year 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 (check out a sample of our picks).

Equally as beneficial, bullish insider trading sentiment is another way to break down the world of equities. There are a variety of reasons for a bullish insider to get rid of shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the market-beating potential of this strategy if you know what to do (learn more here).

Keeping this in mind, it’s important to take a glance at the latest action encompassing Oasis Petroleum Inc. (NYSE:OAS).

How have hedgies been trading Oasis Petroleum Inc. (NYSE:OAS)?

In preparation for this quarter, a total of 22 of the hedge funds we track were bullish in this stock, a change of 22% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their stakes considerably.

Of the funds we track, Ken Griffin’s Citadel Investment Group had the largest position in Oasis Petroleum Inc. (NYSE:OAS), worth close to $51.8 million, accounting for 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Donald Chiboucis of Columbus Circle Investors, with a $44.4 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Louis Bacon’s Moore Global Investments, Charles Clough’s Clough Capital Partners and Amy Minella’s Cardinal Capital.

With a general bullishness amongst the heavyweights, key hedge funds have jumped into Oasis Petroleum Inc. (NYSE:OAS) headfirst. Clough Capital Partners, managed by Charles Clough, assembled the biggest position in Oasis Petroleum Inc. (NYSE:OAS). Clough Capital Partners had 18.3 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also initiated a $8.4 million position during the quarter. The other funds with brand new OAS positions are Richard Driehaus’s Driehaus Capital, Noam Gottesman’s GLG Partners, and Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners.

How are insiders trading Oasis Petroleum Inc. (NYSE:OAS)?

Insider purchases made by high-level executives is particularly usable when the company we’re looking at has seen transactions within the past 180 days. Over the last 180-day time period, Oasis Petroleum Inc. (NYSE:OAS) has experienced zero unique insiders buying, and 3 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Oasis Petroleum Inc. (NYSE:OAS). These stocks are Ultra Petroleum Corp. (NYSE:UPL), WPX Energy Inc (NYSE:WPX), SM Energy Co. (NYSE:SM), Energen Corporation (NYSE:EGN), and Gulfport Energy Corporation (NASDAQ:GPOR). All of these stocks are in the independent oil & gas industry and their market caps are similar to OAS’s market cap.

With the returns shown by the aforementioned research, everyday investors should always watch hedge fund and insider trading sentiment, and Oasis Petroleum Inc. (NYSE:OAS) applies perfectly to this mantra.

Click here to learn why you should track hedge funds