Swift Energy Company (NYSE:SFY) has seen an increase in activity from the world’s largest hedge funds recently.
To most investors, hedge funds are perceived as underperforming, outdated investment vehicles of years past. While there are greater than 8000 funds in operation at the moment, we hone in on the aristocrats of this group, close to 450 funds. Most estimates calculate that this group has its hands on most of the smart money’s total asset base, and by keeping an eye on their best stock picks, we have found a few investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 25 percentage points in 6.5 month (see all of our picks from August).
Equally as key, optimistic insider trading activity is a second way to parse down the marketplace. Just as you’d expect, there are many reasons for an insider to sell shares of his or her company, but just one, very simple reason why they would behave bullishly. Many academic studies have demonstrated the valuable potential of this tactic if investors understand where to look (learn more here).
Keeping this in mind, it’s important to take a glance at the key action surrounding Swift Energy Company (NYSE:SFY).
What have hedge funds been doing with Swift Energy Company (NYSE:SFY)?
At year’s end, a total of 14 of the hedge funds we track held long positions in this stock, a change of 56% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their holdings significantly.
According to our comprehensive database, Gregg J. Powers’s Private Capital Management had the biggest position in Swift Energy Company (NYSE:SFY), worth close to $23 million, accounting for 2.2% of its total 13F portfolio. The second largest stake is held by AQR Capital Management, managed by Cliff Asness, which held a $11 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedgies that are bullish include Chuck Royce’s Royce & Associates, Ken Griffin’s Citadel Investment Group and Jim Simons’s Renaissance Technologies.
Now, specific money managers were breaking ground themselves. Renaissance Technologies, managed by Jim Simons, created the biggest position in Swift Energy Company (NYSE:SFY). Renaissance Technologies had 4 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also made a $2 million investment in the stock during the quarter. The other funds with brand new SFY positions are Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners, Israel Englander’s Millennium Management, and Mike Vranos’s Ellington.
What do corporate executives and insiders think about Swift Energy Company (NYSE:SFY)?
Insider buying is most useful when the primary stock in question has experienced transactions within the past half-year. Over the latest 180-day time period, Swift Energy Company (NYSE:SFY) has experienced 5 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Swift Energy Company (NYSE:SFY). These stocks are Sanchez Energy Corp (NYSE:SN), Contango Oil & Gas Company (NYSEAMEX:MCF), Chesapeake Granite Wash Trust (NYSE:CHKR), Forest Oil Corporation (NYSE:FST), and TransGlobe Energy Corporation (USA) (NASDAQ:TGA). This group of stocks are in the independent oil & gas industry and their market caps are similar to SFY’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Sanchez Energy Corp (NYSE:SN)||7||1||3|
|Contango Oil & Gas Company (NYSEAMEX:MCF)||9||3||0|
|Chesapeake Granite Wash Trust (NYSE:CHKR)||4||0||0|
|Forest Oil Corporation (NYSE:FST)||20||0||0|
|TransGlobe Energy Corporation (USA) (NASDAQ:TGA)||3||0||0|
With the returns exhibited by our strategies, everyday investors must always keep an eye on hedge fund and insider trading sentiment, and Swift Energy Company (NYSE:SFY) shareholders fit into this picture quite nicely.
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.