Is EXCO Resources Inc (NYSE:XCO) a buy right now? The best stock pickers are becoming hopeful. The number of bullish hedge fund positions moved up by 1 recently.
At the moment, there are a multitude of indicators market participants can use to watch their holdings. Some of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a superb margin (see just how much).
Equally as integral, positive insider trading sentiment is a second way to break down the financial markets. As the old adage goes: there are a number of reasons for an executive to downsize shares of his or her company, but only one, very simple reason why they would buy. Plenty of empirical studies have demonstrated the impressive potential of this strategy if investors know what to do (learn more here).
Keeping this in mind, we're going to take a look at the latest action regarding EXCO Resources Inc (NYSE:XCO).
At the end of the fourth quarter, a total of 19 of the hedge funds we track held long positions in this stock, a change of 6% from one quarter earlier. With the smart money's positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their stakes meaningfully.
Of the funds we track, Howard Marks's Oaktree Capital Management had the most valuable position in EXCO Resources Inc (NYSE:XCO), worth close to $249 million, comprising 4.6% of its total 13F portfolio. The second largest stake is held by Invesco Private Capital (WL Ross), managed by Wilbur Ross, which held a $213 million position; the fund has 19.9% of its 13F portfolio invested in the stock. Remaining peers that are bullish include Prem Watsa's Fairfax Financial Holdings, Phil Falcone's Harbinger and Charles Clough's Clough Capital Partners.
With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Clough Capital Partners, managed by Charles Clough, established the most outsized position in EXCO Resources Inc (NYSE:XCO). Clough Capital Partners had 9 million invested in the company at the end of the quarter. Mark Kingdon's Kingdon Capital also initiated a $2 million position during the quarter. The following funds were also among the new XCO investors: John Fichthorn's Dialectic Capital Management, Richard C. Patton's Courage Capital, and Glenn Russell Dubin's Highbridge Capital Management.
Bullish insider trading is best served when the company we're looking at has seen transactions within the past six months. Over the last half-year time period, EXCO Resources Inc (NYSE:XCO) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
With the results shown by our studies, everyday investors should always keep an eye on hedge fund and insider trading activity, and EXCO Resources Inc (NYSE:XCO) is an important part of this process.
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