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Hedge Funds Are Selling Goodrich Petroleum Corporation (GDP)

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Goodrich Petroleum Corporation (NYSE:GDP) was in 12 hedge funds’ portfolio at the end of the fourth quarter of 2012. GDP shareholders have witnessed a decrease in hedge fund interest lately. There were 13 hedge funds in our database with GDP holdings at the end of the previous quarter.

In the eyes of most shareholders, hedge funds are perceived as worthless, outdated investment tools of the past. While there are more than 8000 funds with their doors open at present, we hone in on the elite of this club, about 450 funds. Most estimates calculate that this group oversees most of the smart money’s total asset base, and by monitoring their best stock picks, we have brought to light a few investment strategies that have historically outpaced Mr. Market. 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 all of our picks from August).

Just as important, bullish insider trading activity is a second way to break down the world of equities. As the old adage goes: there are lots of stimuli for an executive to drop shares of his or her company, but just one, very clear reason why they would behave bullishly. Plenty of academic studies have demonstrated the useful potential of this tactic if investors understand what to do (learn more here).

With these “truths” under our belt, let’s take a gander at the latest action encompassing Goodrich Petroleum Corporation (NYSE:GDP).

What have hedge funds been doing with Goodrich Petroleum Corporation (NYSE:GDP)?

At year’s end, a total of 12 of the hedge funds we track were bullish in this stock, a change of -8% from one quarter earlier. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were upping their holdings considerably.

SAC CAPITAL ADVISORSWhen looking at the hedgies we track, SAC Capital Advisors, managed by Steven Cohen, holds the most valuable position in Goodrich Petroleum Corporation (NYSE:GDP). SAC Capital Advisors has a $10 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is ADAR Investment Management, managed by Abby Flamholz and Yehuda Blinder, which held a $8.7 million position; 1.9% of its 13F portfolio is allocated to the stock. Other hedge funds with similar optimism include Chuck Royce’s Royce & Associates, Jim Simons’s Renaissance Technologies and Anthony Giammalva’s Sound Energy Partners.

Judging by the fact that Goodrich Petroleum Corporation (NYSE:GDP) has witnessed bearish sentiment from hedge fund managers, logic holds that there exists a select few money managers that slashed their full holdings in Q4. Intriguingly, Richard Schimel’s Diamondback Capital dropped the biggest position of the 450+ funds we monitor, worth close to $8.3 million in stock.. Remy Trafelet’s fund, Trafelet Capital, also said goodbye to its stock, about $3.1 million worth. These moves are important to note, as total hedge fund interest was cut by 1 funds in Q4.

What do corporate executives and insiders think about Goodrich Petroleum Corporation (NYSE:GDP)?

Bullish insider trading is at its handiest when the company in focus has experienced transactions within the past six months. Over the last 180-day time frame, Goodrich Petroleum Corporation (NYSE:GDP) has experienced 3 unique insiders buying, and 2 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Goodrich Petroleum Corporation (NYSE:GDP). These stocks are Enduro Royalty Trust (NYSE:NDRO), Clayton Williams Energy, Inc. (NASDAQ:CWEI), Contango Oil & Gas Company (NYSEAMEX:MCF), Midstates Petroleum Company Inc (NYSE:MPO), and Permian Basin Royalty Trust (NYSE:PBT). All of these stocks are in the independent oil & gas industry and their market caps are similar to GDP’s market cap.

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