Is Apache Corporation (NYSE:APA) a buy, sell, or hold? Hedge funds are becoming less hopeful. The number of bullish hedge fund bets went down by 6 recently.
To most traders, hedge funds are viewed as worthless, outdated investment vehicles of yesteryear. While there are over 8000 funds trading at the moment, we at Insider Monkey look at the masters of this club, around 450 funds. It is widely believed that this group oversees the lion’s share of the smart money’s total capital, and by monitoring their top stock picks, we have identified a few investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).
Just as important, positive insider trading sentiment is another way to break down the financial markets. As the old adage goes: there are lots of incentives for a corporate insider to drop shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Several empirical studies have demonstrated the valuable potential of this method if “monkeys” understand where to look (learn more here).
Consequently, we’re going to take a glance at the latest action encompassing Apache Corporation (NYSE:APA).
How have hedgies been trading Apache Corporation (NYSE:APA)?
At the end of the fourth quarter, a total of 34 of the hedge funds we track were bullish in this stock, a change of -15% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their stakes considerably.
When looking at the hedgies we track, Eagle Capital Management, managed by Boykin Curry, holds the largest position in Apache Corporation (NYSE:APA). Eagle Capital Management has a $359.4 million position in the stock, comprising 2.6% of its 13F portfolio. On Eagle Capital Management’s heels is Citadel Investment Group, managed by Ken Griffin, which held a $200.8 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Remaining peers that are bullish include Jean-Marie Eveillard’s First Eagle Investment Management, Ric Dillon’s Diamond Hill Capital and Thomas E. Claugus’s GMT Capital.
Seeing as Apache Corporation (NYSE:APA) has witnessed a declination in interest from the entirety of the hedge funds we track, it’s safe to say that there exists a select few hedge funds who were dropping their full holdings in Q4. Intriguingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dropped the biggest stake of all the hedgies we track, totaling close to $43.5 million in stock.. Andrew Hall’s fund, Astenbeck Capital Management, also dumped its stock, about $14.4 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 6 funds in Q4.
What have insiders been doing with Apache Corporation (NYSE:APA)?
Bullish insider trading is most useful when the company in question has experienced transactions within the past half-year. Over the last half-year time period, Apache Corporation (NYSE:APA) has seen 5 unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Apache Corporation (NYSE:APA). These stocks are Noble Energy, Inc. (NYSE:NBL), Anadarko Petroleum Corporation (NYSE:APC), Devon Energy Corp (NYSE:DVN), Canadian Natural Resource Ltd (USA) (NYSE:CNQ), and EOG Resources Inc (NYSE:EOG). This group of stocks belong to the independent oil & gas industry and their market caps are similar to APA’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Noble Energy, Inc. (NYSE:NBL)||28||0||9|
|Anadarko Petroleum Corporation (NYSE:APC)||62||0||2|
|Devon Energy Corp (NYSE:DVN)||40||0||1|
|Canadian Natural Resource Ltd (USA) (NYSE:CNQ)||29||0||0|
|EOG Resources Inc (NYSE:EOG)||41||0||8|
With the results exhibited by Insider Monkey’s tactics, everyday investors must always pay attention to hedge fund and insider trading activity, and Apache Corporation (NYSE:APA) is no exception.
On the following pages, we’ll reveal the secrets of the 7 most bullish money managers invested in Apache: