Approach Resources Inc. (NASDAQ:AREX) was in 5 hedge funds’ portfolio at the end of December. AREX shareholders have witnessed a decrease in support from the world’s most elite money managers lately. There were 13 hedge funds in our database with AREX positions at the end of the previous quarter.
To the average investor, there are a multitude of gauges shareholders can use to track Mr. Market. A pair of the most useful are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top money managers can outpace the S&P 500 by a solid margin (see just how much).
Equally as integral, optimistic insider trading sentiment is a second way to parse down the financial markets. There are lots of stimuli for an insider to sell shares of his or her company, but only one, very clear reason why they would buy. Several academic studies have demonstrated the market-beating potential of this method if shareholders understand where to look (learn more here).
Keeping this in mind, it’s important to take a glance at the latest action surrounding Approach Resources Inc. (NASDAQ:AREX).
What have hedge funds been doing with Approach Resources Inc. (NASDAQ:AREX)?
At the end of the fourth quarter, a total of 5 of the hedge funds we track were bullish in this stock, a change of -62% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their holdings substantially.
According to our comprehensive database, Donald Chiboucis’s Columbus Circle Investors had the largest position in Approach Resources Inc. (NASDAQ:AREX), worth close to $17 million, comprising 0.1% of its total 13F portfolio. Coming in second is Millennium Management, managed by Israel Englander, which held a $9 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedgies with similar optimism include Russell Lucas’s Lucas Capital Management, Van Schreiber’s Bennett Lawrence Management and Chuck Royce’s Royce & Associates.
Seeing as Approach Resources Inc. (NASDAQ:AREX) has witnessed declining sentiment from the smart money, we can see that there exists a select few money managers who were dropping their positions entirely at the end of the year. Interestingly, Cliff Asness’s AQR Capital Management said goodbye to the biggest investment of the 450+ funds we key on, totaling an estimated $4 million in stock.. SAC Subsidiary’s fund, Sigma Capital Management, also sold off its stock, about $3 million worth. These transactions are interesting, as total hedge fund interest dropped by 8 funds at the end of the year.
What do corporate executives and insiders think about Approach Resources Inc. (NASDAQ:AREX)?
Insider trading activity, especially when it’s bullish, is particularly usable when the company in question has experienced transactions within the past half-year. Over the latest six-month time frame, Approach Resources Inc. (NASDAQ:AREX) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Approach Resources Inc. (NASDAQ:AREX). These stocks are W&T Offshore, Inc. (NYSE:WTI), Pioneer Southwest Energy Partners L.P. (NYSE:PSE), Rex Energy Corporation (NASDAQ:REXX), Northern Oil & Gas, Inc. (NYSEAMEX:NOG), and Bill Barrett Corporation (NYSE:BBG). All of these stocks are in the oil & gas drilling & exploration industry and their market caps match AREX’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|W&T Offshore, Inc. (NYSE:WTI)||10||2||0|
|Pioneer Southwest Energy Partners L.P. (NYSE:PSE)||2||1||0|
|Rex Energy Corporation (NASDAQ:REXX)||4||1||1|
|Northern Oil & Gas, Inc. (NYSEAMEX:NOG)||7||0||1|
|Bill Barrett Corporation (NYSE:BBG)||13||0||0|
With the results shown by the aforementioned research, retail investors should always watch hedge fund and insider trading sentiment, and Approach Resources Inc. (NASDAQ:AREX) is an important part of this process.
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