Lone Pine Resources Inc (NYSE:LPR) investors should be aware of a decrease in hedge fund interest lately.
To most shareholders, hedge funds are seen as worthless, old financial tools of years past. While there are more than 8000 funds trading today, we at Insider Monkey look at the bigwigs of this club, close to 450 funds. Most estimates calculate that this group has its hands on most of all hedge funds' total asset base, and by paying attention to their best picks, we have unearthed a few investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year 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 23.3 percentage points in 8 months (see the details here).
Equally as key, positive insider trading activity is a second way to parse down the investments you're interested in. Just as you'd expect, there are a number of motivations for an executive to cut shares of his or her company, but only one, very clear reason why they would behave bullishly. Several academic studies have demonstrated the impressive potential of this strategy if piggybackers understand what to do (learn more here).
Consequently, let's take a peek at the recent action surrounding Lone Pine Resources Inc (NYSE:LPR).
Heading into Q2, a total of 8 of the hedge funds we track held long positions in this stock, a change of -11% from the previous quarter. With hedge funds' sentiment swirling, there exists an "upper tier" of notable hedge fund managers who were boosting their stakes considerably.
According to our comprehensive database, Owl Creek Asset Management, managed by Jeffrey Altman, holds the largest position in Lone Pine Resources Inc (NYSE:LPR). Owl Creek Asset Management has a $7.3 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is Corvex Capital, managed by Keith Meister, which held a $4.7 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include David Moradi's Anthion Management, Ryan Schaper's Point Lobos Capital and Jim Simons's Renaissance Technologies.
Since Lone Pine Resources Inc (NYSE:LPR) has witnessed bearish sentiment from hedge fund managers, it's safe to say that there lies a certain "tier" of funds that decided to sell off their positions entirely at the end of the first quarter. It's worth mentioning that Abby Flamholz and Yehuda Blinder's ADAR Investment Management said goodbye to the biggest position of the 450+ funds we watch, valued at an estimated $0.4 million in stock.. Ben Levine, Andrew Manuel and Stefan Renold's fund, LMR Partners, also said goodbye to its stock, about $0.1 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 1 funds at the end of the first quarter.
Insider purchases made by high-level executives is best served when the company in focus has experienced transactions within the past half-year. Over the latest 180-day time frame, Lone Pine Resources Inc (NYSE:LPR) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
With the returns shown by the aforementioned strategies, retail investors must always keep an eye on hedge fund and insider trading activity, and Lone Pine Resources Inc (NYSE:LPR) applies perfectly to this mantra.