Oasis Petroleum Inc. (NYSE:OAS) shareholders have witnessed an increase in activity from the world’s largest hedge funds in recent months.
In the eyes of most shareholders, hedge funds are viewed as unimportant, outdated investment tools of yesteryear. While there are more than 8000 funds with their doors open at the moment, we choose to focus on the top tier of this club, about 450 funds. It is widely believed that this group oversees most of all hedge funds’ total asset base, and by keeping an eye on their best stock picks, we have figured out a number of investment strategies that have historically outperformed the market. 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 outclassed the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Just as key, positive insider trading activity is another way to parse down the marketplace. There are a number of stimuli for an executive to downsize shares of his or her company, but only one, very obvious reason why they would buy. Plenty of academic studies have demonstrated the useful potential of this strategy if piggybackers understand where to look (learn more here).
Keeping this in mind, let’s take a look at the latest action regarding Oasis Petroleum Inc. (NYSE:OAS).
How are hedge funds trading Oasis Petroleum Inc. (NYSE:OAS)?
Heading into 2013, a total of 16 of the hedge funds we track held long positions in this stock, a change of 33% from the third quarter. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes considerably.
Of the funds we track, Citadel Investment Group, managed by Ken Griffin, holds the largest position in Oasis Petroleum Inc. (NYSE:OAS). Citadel Investment Group has a $55.7 million position in the stock, comprising 0.1% of its 13F portfolio. On Citadel Investment Group’s heels is SAC Capital Advisors, managed by Steven Cohen, which held a $52.1 million position; 0.3% of its 13F portfolio is allocated to the company. Other hedge funds that are bullish include Israel Englander’s Millennium Management, Donald Chiboucis’s Columbus Circle Investors and John H. Scully’s SPO Advisory Corp.
As aggregate interest increased, key hedge funds were breaking ground themselves. Carlson Capital, managed by Clint Carlson, initiated the most valuable position in Oasis Petroleum Inc. (NYSE:OAS). Carlson Capital had 14.5 million invested in the company at the end of the quarter. SAC Subsidiary’s Sigma Capital Management also made a $12.2 million investment in the stock during the quarter. The other funds with new positions in the stock are John Hurley’s Cavalry Asset Management, SAC Subsidiary’s CR Intrinsic Investors, and John Overdeck and David Siegel’s Two Sigma Advisors.
How have insiders been trading Oasis Petroleum Inc. (NYSE:OAS)?
Insider buying is particularly usable when the company we’re looking at has experienced transactions within the past 180 days. Over the latest 180-day time frame, Oasis Petroleum Inc. (NYSE:OAS) has experienced zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Oasis Petroleum Inc. (NYSE:OAS). These stocks are Ultra Petroleum Corp. (NYSE:UPL), WPX Energy Inc (NYSE:WPX), SM Energy Co. (NYSE:SM), Energen Corporation (NYSE:EGN), and Gulfport Energy Corporation (NASDAQ:GPOR). This group of stocks are the members of the independent oil & gas industry and their market caps match OAS’s market cap.