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Hedge Funds Are Crazy About Atlas Resource Partners, L.P. (ARP)

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Atlas Resource Partners, L.P. (NYSE:ARP) has experienced an increase in support from the world’s most elite money managers lately.

If you’d ask most stock holders, hedge funds are seen as slow, outdated financial tools of years past. While there are greater than 8000 funds in operation at present, we at Insider Monkey hone in on the leaders of this group, around 450 funds. Most estimates calculate that this group oversees the lion’s share of all hedge funds’ total capital, and by keeping an eye on their top investments, we have unsheathed a number of investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 24 percentage points in 7 months (see the details here).

Atlas Resource Partners, L.P. (NYSE:ARP)

Just as important, positive insider trading sentiment is a second way to break down the stock market universe. Just as you’d expect, there are lots of incentives for an insider to drop shares of his or her company, but only one, very simple reason why they would buy. Several empirical studies have demonstrated the impressive potential of this method if shareholders understand what to do (learn more here).

With these “truths” under our belt, we’re going to take a gander at the recent action surrounding Atlas Resource Partners, L.P. (NYSE:ARP).

How are hedge funds trading Atlas Resource Partners, L.P. (NYSE:ARP)?

At the end of the fourth quarter, a total of 8 of the hedge funds we track held long positions in this stock, a change of 33% from the third quarter. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were increasing their holdings significantly.

When looking at the hedgies we track, Leon Cooperman’s Omega Advisors had the biggest position in Atlas Resource Partners, L.P. (NYSE:ARP), worth close to $59.5 million, comprising 1.1% of its total 13F portfolio. Coming in second is Senator Investment Group, managed by Doug Silverman, which held a $23.7 million position; 0.5% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions include Wayne Cooperman’s Cobalt Capital Management, Remy Trafelet’s Trafelet Capital and Stephen J. Errico’s Locust Wood Capital Advisers.

Consequently, key money managers were breaking ground themselves. Trafelet Capital, managed by Remy Trafelet, assembled the most outsized position in Atlas Resource Partners, L.P. (NYSE:ARP). Trafelet Capital had 3.5 million invested in the company at the end of the quarter. Stephen J. Errico’s Locust Wood Capital Advisers also initiated a $2.8 million position during the quarter. The following funds were also among the new ARP investors: David Cohen and Harold Levy’s Iridian Asset Management and Jim Simons’s Renaissance Technologies.

How have insiders been trading Atlas Resource Partners, L.P. (NYSE:ARP)?

Insider trading activity, especially when it’s bullish, is best served when the company we’re looking at has seen transactions within the past half-year. Over the last six-month time period, Atlas Resource Partners, L.P. (NYSE:ARP) has experienced 1 unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Atlas Resource Partners, L.P. (NYSE:ARP). These stocks are Heartland Payment Systems, Inc. (NYSE:HPY), ABM Industries, Inc. (NYSE:ABM), NetSpend Holdings Inc (NASDAQ:NTSP), TeleTech Holdings, Inc. (NASDAQ:TTEC), and Quad/Graphics, Inc. (NYSE:QUAD). This group of stocks are in the business services industry and their market caps match ARP’s market cap.

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