Is Concho Resources Inc. (NYSE:CXO) a buy?
In the 21st century investor’s toolkit, there are tons of gauges investors can use to watch the equity markets. A pair of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top fund managers can outperform the market by a superb margin (see just how much).
Just as crucial, optimistic insider trading activity is a second way to analyze the marketplace. There are a number of stimuli for a bullish insider to get rid of shares of his or her company, but only one, very simple reason why they would behave bullishly. Many empirical studies have demonstrated the useful potential of this strategy if piggybackers understand what to do (learn more here).
Furthermore, let’s discuss the latest info surrounding Concho Resources Inc. (NYSE:CXO).
How have hedgies been trading Concho Resources Inc. (NYSE:CXO)?
At Q2’s end, a total of 27 of the hedge funds we track were long in this stock, a change of 29% from the first quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings considerably.
Out of the hedge funds we follow, Natixis Global Asset Management’s Harris Associates had the most valuable position in Concho Resources Inc. (NYSE:CXO), worth close to $135 million, comprising 0.3% of its total 13F portfolio. On Harris Associates’s heels is Steven Cohen of SAC Capital Advisors, with a $79.2 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Some other hedgies that are bullish include Rob Citrone’s Discovery Capital Management, John Overdeck and David Siegel’s Two Sigma Advisors and Ken Griffin’s Citadel Investment Group.
Now, specific money managers were leading the bulls’ herd. SAC Capital Advisors, managed by Steven Cohen, created the most valuable position in Concho Resources Inc. (NYSE:CXO). SAC Capital Advisors had 79.2 million invested in the company at the end of the quarter. Rob Citrone’s Discovery Capital Management also initiated a $26 million position during the quarter. The following funds were also among the new CXO investors: John Overdeck and David Siegel’s Two Sigma Advisors, Ken Griffin’s Citadel Investment Group, and Richard Chilton’s Chilton Investment Company.
What have insiders been doing with Concho Resources Inc. (NYSE:CXO)?
Legal insider trading, particularly when it’s bullish, is at its handiest when the company in question has experienced transactions within the past half-year. Over the latest half-year time frame, Concho Resources Inc. (NYSE:CXO) has seen 1 unique insiders buying, and 4 insider sales (see the details of insider trades here).
We’ll also examine the relationship between both of these indicators in other stocks similar to Concho Resources Inc. (NYSE:CXO). These stocks are Cheniere Energy, Inc. (NYSEAMEX:LNG), ENSCO PLC (NYSE:ESV), Markwest Energy Partners LP (NYSE:MWE), Noble Corporation (NYSE:NE), and Diamond Offshore Drilling Inc (NYSE:DO). This group of stocks are in the oil & gas drilling & exploration industry and their market caps resemble CXO’s market cap.