Should PDC Energy Inc (NASDAQ:PDCE) investors track the following data?
To many traders, hedge funds are perceived as delayed, old financial tools of a forgotten age. Although there are over 8,000 hedge funds trading currently, this site focuses on the top tier of this group, about 525 funds. It is assumed that this group controls the lion’s share of all hedge funds’ total capital, and by tracking their highest performing equity investments, we’ve identified a number of investment strategies that have historically outpaced the S&P 500. Our small-cap hedge fund strategy outpaced 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 beaten the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).
Just as necessary, positive insider trading activity is a second way to look at the stock market universe. Obviously, there are lots of incentives for a bullish insider to downsize shares of his or her company, but only one, very obvious reason why they would behave bullishly. Various empirical studies have demonstrated the useful potential of this method if piggybackers know what to do (learn more here).
Now that that’s out of the way, we’re going to examine the latest info surrounding PDC Energy Inc (NASDAQ:PDCE).
What have hedge funds been doing with PDC Energy Inc (NASDAQ:PDCE)?
Heading into Q3, a total of 19 of the hedge funds we track were bullish in this stock, a change of 0% from the previous quarter. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes substantially.
When using filings from the hedgies we track, Ken Griffin’s Citadel Investment Group had the largest position in PDC Energy Inc (NASDAQ:PDCE), worth close to $114.5 million, accounting for 0.2% of its total 13F portfolio. Sitting at the No. 2 spot is Phill Gross and Robert Atchinson of Adage Capital Management, with a $46.9 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedge funds that are bullish include Sean Cullinan’s Point State Capital, John Murphy’s Alydar Capital and Alec Litowitz and Ross Laser’s Magnetar Capital.
Because PDC Energy Inc (NASDAQ:PDCE) has witnessed a fall in interest from upper-tier hedge fund managers, we can see that there were a few money managers that elected to cut their positions entirely heading into Q2. At the top of the heap, Steven Cohen’s SAC Capital Advisors dropped the largest stake of the “upper crust” of funds we track, totaling an estimated $2.2 million in stock. David Costen Haley’s fund, HBK Investments, also dumped its stock, about $0.9 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
How are insiders trading PDC Energy Inc (NASDAQ:PDCE)?
Bullish insider trading is best served when the company in focus has seen transactions within the past half-year. Over the latest six-month time period, PDC Energy Inc (NASDAQ:PDCE) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll go over the relationship between both of these indicators in other stocks similar to PDC Energy Inc (NASDAQ:PDCE). These stocks are Enbridge Energy Management, L.L.C. (NYSE:EEQ), Gran Tierra Energy Inc. (NYSEAMEX:GTE), Crosstex Energy, L.P. (NASDAQ:XTEX), EXCO Resources Inc (NYSE:XCO), and Bonanza Creek Energy Inc (NYSE:BCEI). This group of stocks are the members of the independent oil & gas industry and their market caps are similar to PDCE’s market cap.