Marathon Petroleum Corp (NYSE:MPC) was in 42 hedge funds' portfolio at the end of the fourth quarter of 2012. MPC investors should pay attention to an increase in hedge fund sentiment in recent months. There were 40 hedge funds in our database with MPC holdings at the end of the previous quarter.
If you'd ask most shareholders, hedge funds are viewed as worthless, outdated financial tools of yesteryear. While there are greater than 8000 funds in operation today, we hone in on the leaders of this club, about 450 funds. It is estimated that this group controls the lion's share of all hedge funds' total capital, and by keeping an eye on their best investments, we have unsheathed a number of investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a 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 outperformed the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Equally as integral, optimistic insider trading sentiment is another way to parse down the investments you're interested in. Obviously, there are many motivations for a corporate insider to downsize shares of his or her company, but just one, very clear reason why they would buy. Various empirical studies have demonstrated the impressive potential of this strategy if "monkeys" understand where to look (learn more here).
With all of this in mind, it's important to take a peek at the key action surrounding Marathon Petroleum Corp (NYSE:MPC).
At the end of the fourth quarter, a total of 42 of the hedge funds we track were bullish in this stock, a change of 5% from one quarter earlier. With the smart money's sentiment swirling, there exists a few notable hedge fund managers who were boosting their holdings substantially.
When looking at the hedgies we track, D. E. Shaw's D E Shaw had the most valuable position in Marathon Petroleum Corp (NYSE:MPC), worth close to $227 million billion, accounting for 0.6% of its total 13F portfolio. Sitting at the No. 2 spot is Sean Cullinan of Point State Capital, with a $113 million position; 0.5% of its 13F portfolio is allocated to the company. Other peers that hold long positions include Robert Pitts's Steadfast Capital Management, John Burbank's Passport Capital and Wayne Cooperman's Cobalt Capital Management.
Consequently, key money managers have jumped into Marathon Petroleum Corp (NYSE:MPC) headfirst. Scopus Asset Management, managed by Alexander Mitchell, initiated the largest position in Marathon Petroleum Corp (NYSE:MPC). Scopus Asset Management had 16 million invested in the company at the end of the quarter. also initiated a $16 million position during the quarter. The following funds were also among the new MPC investors: Stephen J. Errico's Locust Wood Capital Advisers, Ken Heebner's Capital Growth Management, and Louis Bacon's Moore Global Investments.
Insider purchases made by high-level executives is best served when the company in question has seen transactions within the past six months. Over the latest six-month time frame, Marathon Petroleum Corp (NYSE:MPC) has seen zero unique insiders buying, and 6 insider sales (see the details of insider trades here).
With the results demonstrated by our tactics, everyday investors must always keep an eye on hedge fund and insider trading sentiment, and Marathon Petroleum Corp (NYSE:MPC) is an important part of this process.
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