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Hedge Funds Are Selling Southwestern Energy Company (NYSE:SWN)

Southwestern Energy Company (NYSE:SWN) was in 30 hedge funds’ portfolio at the end of December. SWN investors should be aware of a decrease in activity from the world’s largest hedge funds lately. There were 30 hedge funds in our database with SWN holdings at the end of the previous quarter.

According to most traders, hedge funds are seen as unimportant, outdated investment tools of the past. While there are over 8000 funds in operation at the moment, we choose to focus on the upper echelon of this club, close to 450 funds. It is estimated that this group has its hands on the majority of the hedge fund industry’s total capital, and by monitoring their best investments, we have brought to light a number of investment strategies that have historically outperformed the 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 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).

Southwestern Energy Company (NYSE:SWN)Equally as beneficial, positive insider trading activity is a second way to break down the world of equities. Just as you’d expect, there are many reasons for a bullish insider to downsize shares of his or her company, but only one, very simple reason why they would initiate a purchase. Various academic studies have demonstrated the useful potential of this tactic if “monkeys” understand what to do (learn more here).

Keeping this in mind, let’s take a gander at the latest action encompassing Southwestern Energy Company (NYSE:SWN).

How have hedgies been trading Southwestern Energy Company (NYSE:SWN)?

At the end of the fourth quarter, a total of 30 of the hedge funds we track were bullish in this stock, a change of 0% from the third quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes significantly.

According to our comprehensive database, Steadfast Capital Management, managed by Robert Pitts, holds the biggest position in Southwestern Energy Company (NYSE:SWN). Steadfast Capital Management has a $134 million position in the stock, comprising 3.6% of its 13F portfolio. Sitting at the No. 2 spot is Andreas Halvorsen of Viking Global, with a $109 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Other hedge funds that are bullish include Bill Miller’s Legg Mason Capital Management, Israel Englander’s Millennium Management and Wallace Weitz’s Wallace R. Weitz & Co..

Seeing as Southwestern Energy Company (NYSE:SWN) has experienced falling interest from the smart money, logic holds that there were a few funds that elected to cut their full holdings heading into 2013. At the top of the heap, George Soros’s Soros Fund Management dumped the largest stake of the “upper crust” of funds we track, worth an estimated $35 million in stock.. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, also sold off its stock, about $20 million worth. These transactions are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

What do corporate executives and insiders think about Southwestern Energy Company (NYSE:SWN)?

Insider trading activity, especially when it’s bullish, is at its handiest when the company in question has experienced transactions within the past half-year. Over the last 180-day time frame, Southwestern Energy Company (NYSE:SWN) has seen zero unique insiders purchasing, and 12 insider sales (see the details of insider trades here).

With the results shown by the aforementioned studies, retail investors should always pay attention to hedge fund and insider trading activity, and Southwestern Energy Company (NYSE:SWN) applies perfectly to this mantra.

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

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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