Is Goodrich Petroleum Corporation (NYSE:GDP) an outstanding stock to buy now? Hedge funds are in a bullish mood. The number of bullish hedge fund positions inched up by 2 lately.
In the eyes of most market participants, hedge funds are perceived as unimportant, outdated investment tools of yesteryear. While there are over 8000 funds trading at the moment, we at Insider Monkey hone in on the top tier of this group, close to 450 funds. It is estimated that this group has its hands on the majority of all hedge funds' total asset base, and by watching their best picks, we have figured out a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outstripped 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 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 activity is a second way to parse down the financial markets. Just as you'd expect, there are a number of stimuli for an executive to downsize shares of his or her company, but only one, very obvious reason why they would behave bullishly. Various empirical studies have demonstrated the valuable potential of this strategy if investors know what to do (learn more here).
With all of this in mind, let's take a peek at the recent action surrounding Goodrich Petroleum Corporation (NYSE:GDP).
At Q1's end, a total of 14 of the hedge funds we track were bullish in this stock, a change of 17% from the first quarter. With hedge funds' capital changing hands, there exists a few noteworthy hedge fund managers who were upping their holdings meaningfully.
When looking at the hedgies we track, Ken Griffin's Citadel Investment Group had the biggest position in Goodrich Petroleum Corporation (NYSE:GDP), worth close to $29.3 million, comprising less than 0.1%% of its total 13F portfolio. The second largest stake is held by Abby Flamholz and Yehuda Blinder of ADAR Investment Management, with a $16.6 million position; the fund has 3.8% of its 13F portfolio invested in the stock. Some other hedgies that are bullish include Chuck Royce's Royce & Associates, Anthony Giammalva's Sound Energy Partners and T Boone Pickens's BP Capital.
With a general bullishness amongst the heavyweights, some big names have jumped into Goodrich Petroleum Corporation (NYSE:GDP) headfirst. Millennium Management, managed by Israel Englander, created the most valuable position in Goodrich Petroleum Corporation (NYSE:GDP). Millennium Management had 4.1 million invested in the company at the end of the quarter. Richard C. Patton's Courage Capital also made a $4 million investment in the stock during the quarter. The other funds with new positions in the stock are Noam Gottesman's GLG Partners, Richard C. Patton's Courage Capital, and David Gallo's Valinor Management LLC.
Insider trading activity, especially when it's bullish, is particularly usable when the company we're looking at has seen transactions within the past 180 days. Over the latest half-year time frame, Goodrich Petroleum Corporation (NYSE:GDP) has seen 6 unique insiders purchasing, and 2 insider sales (see the details of insider trades here).
With the results demonstrated by our research, everyday investors must always monitor hedge fund and insider trading sentiment, and Goodrich Petroleum Corporation (NYSE:GDP) applies perfectly to this mantra.