Oil States International, Inc. (NYSE:OIS) was in 20 hedge funds’ portfolio at the end of the first quarter of 2013. OIS investors should pay attention to an increase in hedge fund sentiment in recent months. There were 19 hedge funds in our database with OIS positions at the end of the previous quarter.
To most stock holders, hedge funds are seen as worthless, outdated financial tools of yesteryear. While there are over 8000 funds with their doors open today, we choose to focus on the bigwigs of this club, around 450 funds. Most estimates calculate that this group has its hands on the majority of the smart money’s total asset base, and by paying attention to their top picks, we have identified a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy beat 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 23.3 percentage points in 8 months (see all of our picks from August).
Equally as beneficial, bullish insider trading activity is a second way to parse down the stock market universe. Obviously, there are a variety of reasons for an upper level exec to sell shares of his or her company, but only one, very obvious reason why they would behave bullishly. Many academic studies have demonstrated the impressive potential of this tactic if investors understand what to do (learn more here).
With all of this in mind, it’s important to take a gander at the recent action encompassing Oil States International, Inc. (NYSE:OIS).
Hedge fund activity in Oil States International, Inc. (NYSE:OIS)
At Q1’s end, a total of 20 of the hedge funds we track were long in this stock, a change of 5% from the first quarter. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were upping their stakes substantially.
Of the funds we track, Chuck Royce’s Royce & Associates had the largest position in Oil States International, Inc. (NYSE:OIS), worth close to $228.2 million, accounting for 0.7% of its total 13F portfolio. The second largest stake is held by Greenlight Capital, managed by David Einhorn, which held a $220.2 million position; 3.4% of its 13F portfolio is allocated to the company. Remaining hedge funds with similar optimism include Alexander Roepers’s Atlantic Investment Management, Jacob Doft’s Highline Capital Management and D. E. Shaw’s D E Shaw.
As one would reasonably expect, specific money managers were breaking ground themselves. Greenlight Capital, managed by David Einhorn, assembled the largest position in Oil States International, Inc. (NYSE:OIS). Greenlight Capital had 220.2 million invested in the company at the end of the quarter. Youlia Miteva’s Proxima Capital Management also initiated a $19.6 million position during the quarter. The other funds with new positions in the stock are Peter Adam Hochfelder’s Brahman Capital, David Dreman’s Dreman Value Management, and Brian Taylor’s Pine River Capital Management.
How have insiders been trading Oil States International, Inc. (NYSE:OIS)?
Bullish insider trading is best served when the primary stock in question has experienced transactions within the past six months. Over the latest six-month time frame, Oil States International, Inc. (NYSE:OIS) has seen 1 unique insiders purchasing, and 3 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 Oil States International, Inc. (NYSE:OIS). These stocks are Core Laboratories N.V. (NYSE:CLB), RPC, Inc. (NYSE:RES), Dril-Quip, Inc. (NYSE:DRQ), Superior Energy Services, Inc. (NYSE:SPN), and MDU Resources Group Inc (NYSE:MDU). This group of stocks are in the oil & gas equipment & services industry and their market caps match OIS’s market cap.