Patterson-UTI Energy, Inc. (PTEN): Are Hedge Funds Right About This Stock?

What’s a smart Patterson-UTI Energy, Inc. (NASDAQ:PTEN) investor to do?

In the financial world, there are many gauges shareholders can use to track Mr. Market. Two of the most innovative 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 best investment managers can outperform the S&P 500 by a significant amount (see just how much).

Equally as useful, bullish insider trading activity is a second way to look at the financial markets. As the old adage goes: there are many motivations for an upper level exec to cut shares of his or her company, but only one, very simple reason why they would buy. Plenty of empirical studies have demonstrated the impressive potential of this method if shareholders understand what to do (learn more here).

Furthermore, we’re going to analyze the latest info about Patterson-UTI Energy, Inc. (NASDAQ:PTEN).

How are hedge funds trading Patterson-UTI Energy, Inc. (NASDAQ:PTEN)?

Heading into Q3, a total of 25 of the hedge funds we track were bullish in this stock, a change of 56% from one quarter earlier. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were increasing their holdings considerably.

When using filings from the hedgies we track, Kahn Brothers, managed by Irving Kahn, holds the biggest position in Patterson-UTI Energy, Inc. (NASDAQ:PTEN). Kahn Brothers has a $37.5 million position in the stock, comprising 5.8% of its 13F portfolio. The second largest stake is held by Robert Rodriguez and Steven Romick of First Pacific Advisors LLC, with a $35.6 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include Israel Englander’s Millennium Management, Natixis Global Asset Management’s Harris Associates and Jim Simons’s Renaissance Technologies.

With a general bullishness amongst the titans, certain money managers have jumped into Patterson-UTI Energy, Inc. (NASDAQ:PTEN) headfirst. Kahn Brothers, managed by Irving Kahn, assembled the biggest position in Patterson-UTI Energy, Inc. (NASDAQ:PTEN). Kahn Brothers had 37.5 million invested in the company at the end of the quarter. Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC also initiated a $35.6 million position during the quarter. The following funds were also among the new PTEN investors: Israel Englander’s Millennium Management, Jim Simons’s Renaissance Technologies, and Cliff Asness’s AQR Capital Management.

Insider trading activity in Patterson-UTI Energy, Inc. (NASDAQ:PTEN)

Insider buying is most useful when the company in focus has experienced transactions within the past half-year. Over the latest 180-day time frame, Patterson-UTI Energy, Inc. (NASDAQ:PTEN) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll check out the relationship between both of these indicators in other stocks similar to Patterson-UTI Energy, Inc. (NASDAQ:PTEN). These stocks are Pengrowth Energy Corp (USA) (NYSE:PGH), Rowan Companies PLC (NYSE:RDC), Halcon Resources Corp (NYSE:HK), Enerplus Corp (USA) (NYSE:ERF), and Atwood Oceanics, Inc. (NYSE:ATW). This group of stocks belong to the oil & gas drilling & exploration industry and their market caps match PTEN’s market cap.

Using the results demonstrated by the previously mentioned research, regular investors must always watch hedge fund and insider trading sentiment, and Patterson-UTI Energy, Inc. (NASDAQ:PTEN) shareholders fit into this picture quite nicely.

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