Is Whiting Petroleum Corp (NYSE:WLL) worth your attention right now? The best stock pickers are in a bearish mood. The number of bullish hedge fund positions were trimmed by 3 recently.
If you'd ask most stock holders, hedge funds are perceived as underperforming, outdated financial vehicles of years past. While there are greater than 8000 funds with their doors open at present, we at Insider Monkey hone in on the aristocrats of this club, close to 450 funds. It is estimated that this group controls most of the smart money's total asset base, and by paying attention to their best picks, we have brought to light a number of investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year 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 outclassed the S&P 500 index by 25 percentage points in 6.5 month (see the details here).
Equally as important, optimistic insider trading activity is a second way to break down the investments you're interested in. There are a variety of motivations for an executive to sell shares of his or her company, but just one, very simple reason why they would behave bullishly. Many empirical studies have demonstrated the useful potential of this tactic if you understand where to look (learn more here).
With these "truths" under our belt, it's important to take a look at the latest action encompassing Whiting Petroleum Corp (NYSE:WLL).
Heading into 2013, a total of 25 of the hedge funds we track were long in this stock, a change of -11% from the third quarter. With hedge funds' capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were increasing their holdings meaningfully.
According to our comprehensive database, Ken Griffin's Citadel Investment Group had the biggest position in Whiting Petroleum Corp (NYSE:WLL), worth close to $101 million billion, comprising 0.2% of its total 13F portfolio. The second largest stake is held by Balyasny Asset Management, managed by Dmitry Balyasny, which held a $100 million position; the fund has 2.7% of its 13F portfolio invested in the stock. Remaining hedgies that hold long positions include Thomas E. Claugus's GMT Capital, Wayne Cooperman's Cobalt Capital Management and Alec Litowitz and Ross Laser's Magnetar Capital.
Due to the fact that Whiting Petroleum Corp (NYSE:WLL) has witnessed bearish sentiment from the entirety of the hedge funds we track, it's easy to see that there lies a certain "tier" of fund managers who sold off their full holdings in Q4. It's worth mentioning that Chuck Royce's Royce & Associates dropped the largest investment of the 450+ funds we track, worth close to $13 million in stock.. SAC Subsidiary's fund, Sigma Capital Management, also dumped its stock, about $13 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 3 funds in Q4.
Insider trading activity, especially when it's bullish, is most useful when the company in question has seen transactions within the past 180 days. Over the last six-month time period, Whiting Petroleum Corp (NYSE:WLL) has experienced zero unique insiders buying, and 1 insider sales (see the details of insider trades here).
With the returns demonstrated by the aforementioned tactics, everyday investors must always keep an eye on hedge fund and insider trading sentiment, and Whiting Petroleum Corp (NYSE:WLL) shareholders fit into this picture quite nicely.
Insider Monkey's small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.