This Metric Says You Are Smart to Sell Berry Petroleum Company (BRY)

Berry Petroleum Company (NYSE:BRY) was in 7 hedge funds’ portfolio at the end of the fourth quarter of 2012. BRY investors should be aware of a decrease in enthusiasm from smart money of late. There were 8 hedge funds in our database with BRY positions at the end of the previous quarter.

In the 21st century investor’s toolkit, there are plenty of metrics shareholders can use to track stocks. A pair of the most useful are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top investment managers can beat the S&P 500 by a healthy margin (see just how much).

Equally as integral, bullish insider trading activity is a second way to parse down the investments you’re interested in. Just as you’d expect, there are many reasons for an executive to cut shares of his or her company, but only one, very clear reason why they would buy. Several academic studies have demonstrated the impressive potential of this tactic if “monkeys” understand what to do (learn more here).

With all of this in mind, let’s take a look at the latest action surrounding Berry Petroleum Company (NYSE:BRY).

How have hedgies been trading Berry Petroleum Company (NYSE:BRY)?

Heading into 2013, a total of 7 of the hedge funds we track were long in this stock, a change of -13% from the third quarter. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes significantly.

Of the funds we track, Diamond Hill Capital, managed by Ric Dillon, holds the most valuable position in Berry Petroleum Company (NYSE:BRY). Diamond Hill Capital has a $25.3 million position in the stock, comprising 0.3% of its 13F portfolio. Sitting at the No. 2 spot is Dreman Value Management, managed by David Dreman, which held a $17.2 million position; 0.5% of its 13F portfolio is allocated to the stock. Remaining hedge funds that hold long positions include Israel Englander’s Millennium Management, Russell Lucas’s Lucas Capital Management and SAC Subsidiary’s Sigma Capital Management.

Because Berry Petroleum Company (NYSE:BRY) has faced bearish sentiment from the aggregate hedge fund industry, we can see that there is a sect of money managers who sold off their full holdings in Q4. Interestingly, Jim Simons’s Renaissance Technologies dumped the largest stake of all the hedgies we watch, valued at an estimated $8 million in stock.. Dmitry Balyasny’s fund, Balyasny Asset Management, also sold off its stock, about $2.7 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 1 funds in Q4.

What have insiders been doing with Berry Petroleum Company (NYSE:BRY)?

Insider buying is most useful when the primary stock in question has experienced transactions within the past half-year. Over the latest 180-day time frame, Berry Petroleum Company (NYSE:BRY) has seen 2 unique insiders buying, and 11 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Berry Petroleum Company (NYSE:BRY). These stocks are Ultra Petroleum Corp. (NYSE:UPL), Newfield Exploration Co. (NYSE:NFX), Mcmoran Exploration Co (NYSE:MMR), Rosetta Resources Inc. (NASDAQ:ROSE), and Laredo Petroleum Holdings Inc (NYSE:LPI). This group of stocks are in the independent oil & gas industry and their market caps resemble BRY’s market cap.

With the returns exhibited by our research, retail investors should always pay attention to hedge fund and insider trading sentiment, and Berry Petroleum Company (NYSE:BRY) applies perfectly to this mantra.

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