At the moment, there are tons of methods investors can use to monitor the equity markets. 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 top picks of the elite hedge fund managers can outclass the market by a very impressive margin (see just how much).
Just as key, bullish insider trading sentiment is a second way to look at the financial markets. Just as you’d expect, there are plenty of motivations for a bullish insider to get rid of shares of his or her company, but just one, very simple reason why they would initiate a purchase. Many academic studies have demonstrated the useful potential of this strategy if piggybackers know where to look (learn more here).
Keeping this in mind, we’re going to study the recent info surrounding Penn West Petroleum Ltd (USA) (NYSE:PWE).
What does the smart money think about Penn West Petroleum Ltd (USA) (NYSE:PWE)?
At the end of the second quarter, a total of 14 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings meaningfully.
Out of the hedge funds we follow, Matt McLennan’s First Eagle Investment Management had the most valuable position in Penn West Petroleum Ltd (USA) (NYSE:PWE), worth close to $387.1 million, comprising 1.2% of its total 13F portfolio. Sitting at the No. 2 spot is Magnetar Capital, managed by Alec Litowitz and Ross Laser, which held a $47.6 million position; 1.2% of its 13F portfolio is allocated to the stock. Other hedge funds that are bullish include Kenneth Mario Garschina’s Mason Capital Management, Stephen Loukas, David A. Lorber, Zachary George’s FrontFour Capital Group and Greg Boland’s West Face Capital.
As Penn West Petroleum Ltd (USA) (NYSE:PWE) has experienced declining interest from the smart money’s best and brightest, it’s easy to see that there is a sect of hedge funds who sold off their entire stakes at the end of the second quarter. Intriguingly, Neil Chriss’s Hutchin Hill Capital said goodbye to the largest investment of all the hedgies we track, totaling close to $3.4 million in stock, and Steven Cohen of SAC Capital Advisors was right behind this move, as the fund dumped about $2.4 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider trading activity in Penn West Petroleum Ltd (USA) (NYSE:PWE)
Bullish insider trading is at its handiest when the company we’re looking at has seen transactions within the past half-year. Over the last half-year time frame, Penn West Petroleum Ltd (USA) (NYSE:PWE) has seen zero unique insiders purchasing, 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 Penn West Petroleum Ltd (USA) (NYSE:PWE). These stocks are Helmerich & Payne, Inc. (NYSE:HP), Rowan Companies PLC (NYSE:RDC), Whiting Petroleum Corp (NYSE:WLL), Nabors Industries Ltd. (NYSE:NBR), and QEP Resources Inc (NYSE:QEP). This group of stocks are the members of the oil & gas drilling & exploration industry and their market caps are closest to PWE’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Helmerich & Payne, Inc. (NYSE:HP) | 22 | 0 | 0 |
| Rowan Companies PLC (NYSE:RDC) | 25 | 0 | 0 |
| Whiting Petroleum Corp (NYSE:WLL) | 36 | 0 | 0 |
| Nabors Industries Ltd. (NYSE:NBR) | 30 | 0 | 0 |
| QEP Resources Inc (NYSE:QEP) | 24 | 0 | 0 |
Using the results shown by the previously mentioned analyses, average investors must always pay attention to hedge fund and insider trading activity, and Penn West Petroleum Ltd (USA) (NYSE:PWE) is no exception.
