Is Cabot Oil & Gas Corporation (NYSE:COG) the right pick for your portfolio? Money managers are betting on the stock. The number of long hedge fund bets advanced by 3 recently.
To most shareholders, hedge funds are viewed as underperforming, old investment vehicles of yesteryear. While there are over 8000 funds trading today, we at Insider Monkey hone in on the bigwigs of this club, about 450 funds. Most estimates calculate that this group has its hands on the lion’s share of the hedge fund industry’s total capital, and by monitoring their highest performing equity investments, we have determined a few investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a 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 outpaced the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Just as integral, bullish insider trading sentiment is a second way to parse down the financial markets. There are a number of stimuli for a bullish insider to cut shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Many academic studies have demonstrated the valuable potential of this method if “monkeys” know where to look (learn more here).
Keeping this in mind, it’s important to take a look at the key action regarding Cabot Oil & Gas Corporation (NYSE:COG).
Hedge fund activity in Cabot Oil & Gas Corporation (NYSE:COG)
At the end of the first quarter, a total of 35 of the hedge funds we track held long positions in this stock, a change of 9% from the first quarter. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their holdings meaningfully.
According to our comprehensive database, Citadel Investment Group, managed by Ken Griffin, holds the most valuable position in Cabot Oil & Gas Corporation (NYSE:COG). Citadel Investment Group has a $269.1 million position in the stock, comprising 0.4% of its 13F portfolio. Sitting at the No. 2 spot is Sean Cullinan of Point State Capital, with a $107.4 million position; the fund has 1.6% of its 13F portfolio invested in the stock. Remaining peers that are bullish include Donald Chiboucis’s Columbus Circle Investors, Dan Loeb’s Third Point and John Overdeck and David Siegel’s Two Sigma Advisors.
As aggregate interest increased, specific money managers were leading the bulls’ herd. Third Point, managed by Dan Loeb, assembled the most valuable position in Cabot Oil & Gas Corporation (NYSE:COG). Third Point had 84.5 million invested in the company at the end of the quarter. Stanley Druckenmiller’s Duquesne Capital also initiated a $25.8 million position during the quarter. The following funds were also among the new COG investors: Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC, George Soros’s Soros Fund Management, and D. E. Shaw’s D E Shaw.
How are insiders trading Cabot Oil & Gas Corporation (NYSE:COG)?
Insider buying is most useful when the company in focus has seen transactions within the past half-year. Over the last 180-day time period, Cabot Oil & Gas Corporation (NYSE:COG) has experienced zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Cabot Oil & Gas Corporation (NYSE:COG). These stocks are Talisman Energy Inc. (USA) (NYSE:TLM), Southwestern Energy Company (NYSE:SWN), Range Resources Corp. (NYSE:RRC), and Chesapeake Energy Corporation (NYSE:CHK). All of these stocks are in the independent oil & gas industry and their market caps match COG’s market cap.