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Hedge Funds Are Dumping McDermott International (NYSE:MDR)

McDermott International (NYSE:MDR) was in 15 hedge funds’ portfolio at the end of December. MDR shareholders have witnessed a decrease in support from the world’s most elite money managers recently. There were 22 hedge funds in our database with MDR holdings at the end of the previous quarter.

McDermott International (NYSE:MDR)

To the average investor, there are tons of gauges shareholders can use to watch publicly traded companies. A couple of the most useful are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top investment managers can outclass their index-focused peers by a very impressive amount (see just how much).

Equally as important, positive insider trading sentiment is a second way to parse down the stock market universe. Just as you’d expect, there are plenty of incentives for an executive to downsize shares of his or her company, but only one, very simple reason why they would buy. Plenty of empirical studies have demonstrated the market-beating potential of this tactic if piggybackers understand what to do (learn more here).

With these “truths” under our belt, it’s important to take a peek at the latest action surrounding McDermott International (NYSE:MDR).

What have hedge funds been doing with McDermott International (NYSE:MDR)?

At year’s end, a total of 15 of the hedge funds we track held long positions in this stock, a change of -32% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were upping their stakes considerably.

When looking at the hedgies we track, Fisher Asset Management, managed by Ken Fisher, holds the largest position in McDermott International (NYSE:MDR). Fisher Asset Management has a $32 million position in the stock, comprising 0.1% of its 13F portfolio. On Fisher Asset Management’s heels is D E Shaw, managed by D. E. Shaw, which held a $26 million position; 0% of its 13F portfolio is allocated to the stock. Other peers that are bullish include Cliff Asness’s AQR Capital Management, Israel Englander’s Millennium Management and Jim Simons’s Renaissance Technologies.

Due to the fact that McDermott International (NYSE:MDR) has witnessed bearish sentiment from the smart money, logic holds that there were a few money managers that elected to cut their full holdings last quarter. Interestingly, Leon Cooperman’s Omega Advisors dumped the biggest stake of all the hedgies we track, comprising close to $7 million in stock.. Malcolm Fairbairn’s fund, Ascend Capital, also dumped its stock, about $4 million worth. These moves are interesting, as total hedge fund interest dropped by 7 funds last quarter.

How are insiders trading McDermott International (NYSE:MDR)?

Insider trading activity, especially when it’s bullish, is best served when the company in question has seen transactions within the past six months. Over the latest half-year time frame, McDermott International (NYSE:MDR) has experienced zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

With the returns shown by the aforementioned time-tested strategies, retail investors should always pay attention to hedge fund and insider trading sentiment, and McDermott International (NYSE:MDR) shareholders fit into this picture quite nicely.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

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