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Hedge Funds Aren’t Crazy About Kodiak Oil & Gas Corp (USA) (NYSE:KOG) Anymore

Kodiak Oil & Gas Corp (USA) (NYSE:KOG) was in 17 hedge funds’ portfolio at the end of December. KOG investors should pay attention to a decrease in support from the world’s most elite money managers in recent months. There were 17 hedge funds in our database with KOG holdings at the end of the previous quarter.

Kodiak Oil & Gas Corp (USA) (NYSE:KOG)

To most stock holders, hedge funds are assumed to be underperforming, outdated investment vehicles of the past. While there are more than 8000 funds trading today, we at Insider Monkey look at the upper echelon of this club, around 450 funds. Most estimates calculate that this group oversees the lion’s share of all hedge funds’ total capital, and by watching their best picks, we have identified a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year 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 outpaced the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).

Equally as key, bullish insider trading activity is a second way to parse down the financial markets. There are lots of incentives for an insider to get rid of shares of his or her company, but just one, very obvious reason why they would buy. Various academic studies have demonstrated the market-beating potential of this strategy if piggybackers know what to do (learn more here).

Consequently, we’re going to take a gander at the latest action regarding Kodiak Oil & Gas Corp (USA) (NYSE:KOG).

What does the smart money think about Kodiak Oil & Gas Corp (USA) (NYSE:KOG)?

Heading into 2013, a total of 17 of the hedge funds we track were bullish in this stock, a change of 0% from the third quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their stakes considerably.

According to our comprehensive database, Citadel Investment Group, managed by Ken Griffin, holds the biggest position in Kodiak Oil & Gas Corp (USA) (NYSE:KOG). Citadel Investment Group has a $119 million position in the stock, comprising 0.2% of its 13F portfolio. The second largest stake is held by Millennium Management, managed by Israel Englander, which held a $35 million position; 0.6% of its 13F portfolio is allocated to the company. Other peers with similar optimism include Jeffrey Vinik’s Vinik Asset Management, Louis Bacon’s Moore Global Investments and Charles Clough’s Clough Capital Partners.

Due to the fact that Kodiak Oil & Gas Corp (USA) (NYSE:KOG) has witnessed falling interest from the smart money, it’s safe to say that there exists a select few hedge funds that decided to sell off their full holdings in Q4. Intriguingly, Robert Pohly’s Samlyn Capital dumped the largest investment of the 450+ funds we key on, valued at close to $25 million in stock.. Richard Driehaus’s fund, Driehaus Capital, also dumped its stock, about $10 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Insider trading activity in Kodiak Oil & Gas Corp (USA) (NYSE:KOG)

Insider purchases made by high-level executives is at its handiest when the company in focus has seen transactions within the past six months. Over the latest six-month time frame, Kodiak Oil & Gas Corp (USA) (NYSE:KOG) has seen zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).

With the returns exhibited by the aforementioned research, everyday investors should always monitor hedge fund and insider trading sentiment, and Kodiak Oil & Gas Corp (USA) (NYSE:KOG) 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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