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Is Hess Corp. (HES) Going to Burn These Hedge Funds?

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If you were to ask many traders, hedge funds are perceived as delayed, outdated investment vehicles of a period lost to current times. Although there are over 8,000 hedge funds in operation today, this site aim at the crème de la crème of this group, close to 525 funds. It is assumed that this group oversees the majority of the hedge fund industry’s total assets, and by monitoring their highest quality picks, we’ve uncovered a number of investment strategies that have historically outpaced the S&P 500. 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 started sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).

Hess Corp. (NYSE:HES)

Equally as useful, optimistic insider trading sentiment is another way to analyze the marketplace. Just as you’d expect, there are lots of reasons for a corporate insider to sell shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Many academic studies have demonstrated the useful potential of this method if “monkeys” know what to do (learn more here).

What’s more, it’s important to discuss the latest info for Hess Corp. (NYSE:HES).

How have hedgies been trading Hess Corp. (NYSE:HES)?

Heading into Q3, a total of 60 of the hedge funds we track were long in this stock, a change of 2% from the first quarter. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were increasing their stakes meaningfully.

According to our 13F database, Elliott Management, managed by Paul Singer, holds the largest position in Hess Corp. (NYSE:HES). Elliott Management has a $1.1071 billion position in the stock, comprising 21.3% of its 13F portfolio. Sitting at the No. 2 spot is John Paulson of Paulson & Co, with a $309.1 million position; the fund has 2.2% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Ralph V. Whitworth’s Relational Investors, Jeffrey Tannenbaum’s Fir Tree and Jonathon Jacobson’s Highfields Capital Management.

Consequently, specific money managers have been driving this bullishness. Elliott Management, managed by Paul Singer, created the biggest position in Hess Corp. (NYSE:HES). Elliott Management had 1.1071 billion invested in the company at the end of the quarter. John Paulson’s Paulson & Co also made a $309.1 million investment in the stock during the quarter. The following funds were also among the new HES investors: Ralph V. Whitworth’s Relational Investors, Jeffrey Tannenbaum’s Fir Tree, and Jonathon Jacobson’s Highfields Capital Management.

Insider trading activity in Hess Corp. (NYSE:HES)

Legal insider trading, particularly when it’s bullish, is best served when the company in question has seen transactions within the past half-year. Over the latest half-year time frame, Hess Corp. (NYSE:HES) has seen 10 unique insiders buying, and 7 insider sales (see the details of insider trades here).

We’ll also take a look at the relationship between both of these indicators in other stocks similar to Hess Corp. (NYSE:HES). These stocks are Ultrapar Participacoes SA (ADR) (NYSE:UGP), Imperial Oil Limited (USA) (NYSEAMEX:IMO), Marathon Petroleum Corp (NYSE:MPC), Valero Energy Corporation (NYSE:VLO), and Marathon Oil Corporation (NYSE:MRO). All of these stocks are in the oil & gas refining & marketing industry and their market caps are similar to HES’s market cap.

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