What’s a smart Pacific Drilling SA (NYSE:PACD) investor to do?
In the eyes of many of your fellow readers, hedge funds are perceived as bloated, old investment vehicles of a forgotten age. Although there are more than 8,000 hedge funds in operation currently, Insider Monkey aim at the crème de la crème of this group, around 525 funds. It is assumed that this group has its hands on the majority of the smart money’s total assets, and by watching their highest performing investments, we’ve formulated a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outperformed 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 outpaced the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).
Equally as necessary, positive insider trading sentiment is another way to analyze the stock market universe. There are lots of motivations for a bullish insider to sell shares of his or her company, but only one, very simple reason why they would buy. Many empirical studies have demonstrated the impressive potential of this method if shareholders understand where to look (learn more here).
Thus, we’re going to examine the recent info for Pacific Drilling SA (NYSE:PACD).
How are hedge funds trading Pacific Drilling SA (NYSE:PACD)?
At the end of the second quarter, a total of 12 of the hedge funds we track held long positions in this stock, a change of 9% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their stakes significantly.
Out of the hedge funds we follow, HBK Investments, managed by David Costen Haley, holds the largest position in Pacific Drilling SA (NYSE:PACD). HBK Investments has a $35.7 million position in the stock, comprising 0.6% of its 13F portfolio. Coming in second is Phill Gross and Robert Atchinson of Adage Capital Management, with a $33.5 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include Eric Mindich’s Eton Park Capital, Israel Englander’s Millennium Management and James Dinan’s York Capital Management.
As one would understandably expect, particular hedge funds were leading the bulls’ herd. HBK Investments, managed by David Costen Haley, initiated the most valuable position in Pacific Drilling SA (NYSE:PACD). HBK Investments had 35.7 million invested in the company at the end of the quarter. Phill Gross and Robert Atchinson’s Adage Capital Management also made a $33.5 million investment in the stock during the quarter. The other funds with brand new PACD positions are Eric Mindich’s Eton Park Capital, Israel Englander’s Millennium Management, and James Dinan’s York Capital Management.
Insider trading activity in Pacific Drilling SA (NYSE:PACD)
Insider buying made by high-level executives is most useful when the primary stock in question has seen transactions within the past half-year. Over the latest half-year time period, Pacific Drilling SA (NYSE:PACD) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll also review the relationship between both of these indicators in other stocks similar to Pacific Drilling SA (NYSE:PACD). These stocks are Kodiak Oil & Gas Corp (USA) (NYSE:KOG), BreitBurn Energy Partners L.P. (NASDAQ:BBEP), EV Energy Partners, L.P. (NASDAQ:EVEP), Ocean Rig UDW Inc (NASDAQ:ORIG), and Unit Corporation (NYSE:UNT). This group of stocks are in the oil & gas drilling & exploration industry and their market caps are closest to PACD’s market cap.