Weatherford International Ltd (NYSE:WFT) was in 34 hedge funds' portfolio at the end of December. WFT has experienced an increase in hedge fund sentiment in recent months. There were 33 hedge funds in our database with WFT positions at the end of the previous quarter.
To most investors, hedge funds are viewed as slow, outdated financial vehicles of years past. While there are more than 8000 funds with their doors open at present, we at Insider Monkey look at the upper echelon of this group, around 450 funds. Most estimates calculate that this group controls most of the hedge fund industry's total asset base, and by keeping an eye on their highest performing stock picks, we have uncovered a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually 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 beaten the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Just as important, optimistic insider trading activity is another way to break down the financial markets. Obviously, there are a variety of stimuli for an upper level exec to sell shares of his or her company, but just one, very clear reason why they would behave bullishly. Plenty of academic studies have demonstrated the valuable potential of this strategy if piggybackers know where to look (learn more here).
With all of this in mind, we're going to take a peek at the key action regarding Weatherford International Ltd (NYSE:WFT).
Heading into 2013, a total of 34 of the hedge funds we track were long in this stock, a change of 3% from the third quarter. With hedge funds' capital changing hands, there exists an "upper tier" of key hedge fund managers who were upping their holdings substantially.
When looking at the hedgies we track, William B. Gray's Orbis Investment Management had the most valuable position in Weatherford International Ltd (NYSE:WFT), worth close to $670 million, comprising 6.7% of its total 13F portfolio. Coming in second is Steven Cohen of SAC Capital Advisors, with a $140 million call position; 1.8% of its 13F portfolio is allocated to the company. Some other hedge funds with similar optimism include Mario Gabelli's GAMCO Investors, Jeffrey Vinik's Vinik Asset Management and Ken Griffin's Citadel Investment Group.
Consequently, key hedge funds were breaking ground themselves. Vinik Asset Management, managed by Jeffrey Vinik, initiated the biggest position in Weatherford International Ltd (NYSE:WFT). Vinik Asset Management had 62 million invested in the company at the end of the quarter. David Tepper's Appaloosa Management LP also made a $56 million investment in the stock during the quarter. The other funds with brand new WFT positions are Israel Englander's Millennium Management, Boaz Weinstein's Saba Capital, and Paul Tanico's Castlerock Asset Management.
Bullish insider trading is best served when the company in focus has experienced transactions within the past six months. Over the latest six-month time frame, Weatherford International Ltd (NYSE:WFT) has seen 7 unique insiders buying, and zero insider sales (see the details of insider trades here).
With the returns shown by our strategies, everyday investors should always pay attention to hedge fund and insider trading activity, and Weatherford International Ltd (NYSE:WFT) is no exception.
Insider Monkey's small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.