CNOOC Limited (ADR) (NYSE:CEO) was in 10 hedge funds' portfolio at the end of the fourth quarter of 2012. CEO investors should pay attention to a decrease in enthusiasm from smart money recently. There were 12 hedge funds in our database with CEO holdings at the end of the previous quarter.
According to most market participants, hedge funds are seen as slow, outdated investment tools of yesteryear. While there are greater than 8000 funds with their doors open at present, we at Insider Monkey choose to focus on the upper echelon of this club, about 450 funds. It is estimated that this group has its hands on the majority of the smart money's total asset base, and by paying attention to their top investments, we have brought to light a number of investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 trumped the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Equally as beneficial, positive insider trading sentiment is another way to break down the marketplace. Obviously, there are many stimuli for an upper level exec to get rid of shares of his or her company, but only one, very simple reason why they would initiate a purchase. Plenty of academic studies have demonstrated the market-beating potential of this strategy if shareholders know what to do (learn more here).
Consequently, we're going to take a gander at the key action regarding CNOOC Limited (ADR) (NYSE:CEO).
At the end of the fourth quarter, a total of 10 of the hedge funds we track were bullish in this stock, a change of -17% from one quarter earlier. With the smart money's sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their stakes meaningfully.
Of the funds we track, Ken Fisher's Fisher Asset Management had the biggest position in CNOOC Limited (ADR) (NYSE:CEO), worth close to $418.8 million, comprising 1.2% of its total 13F portfolio. Sitting at the No. 2 spot is Cliff Asness of AQR Capital Management, with a $11.7 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedge funds with similar optimism include Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, Joel Greenblatt's Gotham Asset Management and Jane Mendillo's Harvard Management Co.
Judging by the fact that CNOOC Limited (ADR) (NYSE:CEO) has witnessed falling interest from the smart money, we can see that there were a few fund managers that elected to cut their entire stakes heading into 2013. It's worth mentioning that Jim Simons's Renaissance Technologies cut the largest investment of the 450+ funds we key on, valued at an estimated $13.8 million in stock.. Sander Gerber's fund, Hudson Bay Capital Management, also sold off its stock, about $0.9 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 2 funds heading into 2013.
Insider buying is at its handiest when the company in focus has experienced transactions within the past 180 days. Over the latest half-year time frame, CNOOC Limited (ADR) (NYSE:CEO) has experienced zero unique insiders buying, and zero 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 CNOOC Limited (ADR) (NYSE:CEO). These stocks are EOG Resources Inc (NYSE:EOG), Canadian Natural Resource Ltd (USA) (NYSE:CNQ), Anadarko Petroleum Corporation (NYSE:APC), Suncor Energy Inc. (USA) (NYSE:SU), and Enterprise Products Partners L.P. (NYSE:EPD). This group of stocks belong to the independent oil & gas industry and their market caps resemble CEO's market cap.