Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Is Hercules Offshore, Inc. (NASDAQ:HERO) Going to Burn These Hedge Funds? – W&T Offshore, Inc. (NYSE:WTI), Crestwood Midstream Partners LP (NYSE:CMLP)

Hercules Offshore, Inc. (NASDAQ:HERO) was in 14 hedge funds’ portfolio at the end of the fourth quarter of 2012. HERO investors should be aware of a decrease in activity from the world’s largest hedge funds in recent months. There were 16 hedge funds in our database with HERO positions at the end of the previous quarter.

Crestwood Midstream Partners LP (NYSE:CMLP)

According to most market participants, hedge funds are seen as worthless, outdated investment tools of yesteryear. While there are more than 8000 funds with their doors open at present, we at Insider Monkey hone in on the bigwigs of this group, about 450 funds. Most estimates calculate that this group controls most of the smart money’s total asset base, and by keeping an eye on their top stock picks, we have unsheathed a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually 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 outpaced the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).

Just as beneficial, bullish insider trading sentiment is a second way to parse down the world of equities. As the old adage goes: there are a number of stimuli for an insider to drop shares of his or her company, but only one, very clear reason why they would buy. Several empirical studies have demonstrated the valuable potential of this tactic if shareholders understand where to look (learn more here).

With all of this in mind, it’s important to take a glance at the recent action encompassing Hercules Offshore, Inc. (NASDAQ:HERO).

Hedge fund activity in Hercules Offshore, Inc. (NASDAQ:HERO)

At the end of the fourth quarter, a total of 14 of the hedge funds we track were bullish in this stock, a change of -13% from one quarter earlier. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were increasing their holdings meaningfully.

Of the funds we track, Citadel Investment Group, managed by Ken Griffin, holds the biggest position in Hercules Offshore, Inc. (NASDAQ:HERO). Citadel Investment Group has a $31 million position in the stock, comprising 0% of its 13F portfolio. Coming in second is D E Shaw, managed by D. E. Shaw, which held a $23 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedge funds that are bullish include Israel Englander’s Millennium Management, Dmitry Balyasny’s Balyasny Asset Management and Chuck Royce’s Royce & Associates.

Judging by the fact that Hercules Offshore, Inc. (NASDAQ:HERO) has experienced a declination in interest from the entirety of the hedge funds we track, logic holds that there is a sect of funds that elected to cut their entire stakes in Q4. At the top of the heap, George Soros’s Soros Fund Management cut the largest stake of the “upper crust” of funds we track, comprising close to $7 million in stock., and Tim Flannery of Copia Capital was right behind this move, as the fund sold off about $1 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 2 funds in Q4.

What have insiders been doing with Hercules Offshore, Inc. (NASDAQ:HERO)?

Insider buying is most useful when the company in question has seen transactions within the past half-year. Over the last 180-day time period, Hercules Offshore, Inc. (NASDAQ:HERO) has seen zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Hercules Offshore, Inc. (NASDAQ:HERO). These stocks are Bill Barrett Corporation (NYSE:BBG), W&T Offshore, Inc. (NYSE:WTI), Crestwood Midstream Partners LP (NYSE:CMLP), Key Energy Services, Inc. (NYSE:KEG), and Seadrill Partners LLC (NYSE:SDLP). All of these stocks are in the oil & gas drilling & exploration industry and their market caps are closest to HERO’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Bill Barrett Corporation (NYSE:BBG) 13 0 0
W&T Offshore, Inc. (NYSE:WTI) 10 2 0
Crestwood Midstream Partners LP (NYSE:CMLP) 2 0 0
Key Energy Services, Inc. (NYSE:KEG) 18 4 1
Seadrill Partners LLC (NYSE:SDLP) 6 0 0

With the returns exhibited by Insider Monkey’s studies, everyday investors should always keep an eye on hedge fund and insider trading activity, and Hercules Offshore, Inc. (NASDAQ:HERO) is an important part of this process.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.

Loading Comments...