Will Petroleo Brasileiro Petrobras SA (ADR) (PBR) Burn You?

Will Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) burn you?

In the 21st century investor’s toolkit, there are many indicators shareholders can use to track Mr. Market. A duo of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite investment managers can beat the S&P 500 by a healthy amount (see just how much).

Just as useful, bullish insider trading sentiment is another way to analyze the investments you’re interested in. Just as you’d expect, there are a number of motivations for an executive to sell shares of his or her company, but just one, very obvious reason why they would buy. Many academic studies have demonstrated the market-beating potential of this strategy if “monkeys” understand where to look (learn more here).

Keeping this in mind, it’s important to discuss the latest info for Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR).

Hedge fund activity in Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR)

At Q2’s end, a total of 21 of the hedge funds we track held long positions in this stock, a change of -9% from the previous quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings significantly.

According to our 13F database, SAC Capital Advisors, managed by Steven Cohen, holds the biggest position in Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR). SAC Capital Advisors has a $56.4 million position in the stock, comprising 0.3% of its 13F portfolio. The second largest stake is held by Jason Adler of AlphaBet Management, with a $34.9 million position; 1.7% of its 13F portfolio is allocated to the company. Some other hedgies that are bullish include D. E. Shaw’s D E Shaw, Cliff Asness’s AQR Capital Management and Steven Cohen’s SAC Capital Advisors.

Judging by the fact that Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) has witnessed bearish sentiment from upper-tier hedge fund managers, it’s safe to say that there exists a select few money managers that decided to sell off their full holdings heading into Q2. Interestingly, Daniel S. Och’s OZ Management dumped the largest investment of the “upper crust” of funds we track, valued at an estimated $25.7 million in stock. Brian Taylor’s fund, Pine River Capital Management, also cut its stock, about $8.1 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 2 funds heading into Q2.

What do corporate executives and insiders think about Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR)?

Insider buying made by high-level executives is particularly usable when the primary stock in question has seen transactions within the past 180 days. Over the last half-year time frame, Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR). These stocks are ENSCO PLC (NYSE:ESV), Transocean LTD (NYSE:RIG), Seadrill Ltd (NYSE:SDRL), , and Cenovus Energy Inc (USA) (NYSE:CVE). This group of stocks belong to the oil & gas drilling & exploration industry and their market caps match PBR’s market cap.

Using the results explained by the previously mentioned strategies, regular investors must always pay attention to hedge fund and insider trading sentiment, and Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) shareholders fit into this picture quite nicely.

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