This Metric Says You Are Smart to Sell EOG Resources Inc (EOG)

Is EOG Resources Inc (NYSE:EOG) a bargain? The smart money is becoming less hopeful. The number of bullish hedge fund positions went down by 4 in recent months.

In today’s marketplace, there are plenty of gauges investors can use to analyze Mr. Market. A couple of the most useful are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite hedge fund managers can outclass their index-focused peers by a very impressive margin (see just how much).

Equally as key, optimistic insider trading activity is a second way to parse down the investments you’re interested in. There are many incentives for an insider to sell shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the market-beating potential of this tactic if piggybackers know what to do (learn more here).

Now, we’re going to take a gander at the latest action encompassing EOG Resources Inc (NYSE:EOG).

How have hedgies been trading EOG Resources Inc (NYSE:EOG)?

At the end of the first quarter, a total of 40 of the hedge funds we track held long positions in this stock, a change of -9% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their holdings substantially.

According to our comprehensive database, Ken Griffin’s Citadel Investment Group had the largest position in EOG Resources Inc (NYSE:EOG), worth close to $332.6 million, comprising 0.5% of its total 13F portfolio. On Citadel Investment Group’s heels is Ric Dillon of Diamond Hill Capital, with a $220.2 million position; the fund has 2.3% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include Israel Englander’s Millennium Management, Phill Gross and Robert Atchinson’s Adage Capital Management and Steven Cohen’s SAC Capital Advisors.

Judging by the fact that EOG Resources Inc (NYSE:EOG) has faced declining sentiment from the aggregate hedge fund industry, logic holds that there lies a certain “tier” of hedge funds who were dropping their entire stakes heading into Q2. Intriguingly, Rob Citrone’s Discovery Capital Management sold off the biggest position of all the hedgies we watch, totaling close to $50.6 million in stock.. David Stemerman’s fund, Conatus Capital Management, also dropped its stock, about $48.6 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 4 funds heading into Q2.

Insider trading activity in EOG Resources Inc (NYSE:EOG)

Insider trading activity, especially when it’s bullish, is particularly usable when the company in question has seen transactions within the past six months. Over the latest six-month time frame, EOG Resources Inc (NYSE:EOG) has seen zero unique insiders buying, and 6 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to EOG Resources Inc (NYSE:EOG). These stocks are Devon Energy Corp (NYSE:DVN), Suncor Energy Inc. (USA) (NYSE:SU), Anadarko Petroleum Corporation (NYSE:APC), Apache Corporation (NYSE:APA), and Canadian Natural Resource Ltd (USA) (NYSE:CNQ). This group of stocks belong to the independent oil & gas industry and their market caps resemble EOG’s market cap.

With the results demonstrated by our tactics, everyday investors should always pay attention to hedge fund and insider trading activity, and EOG Resources Inc (NYSE:EOG) is no exception.

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