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Parker Drilling Company (PKD): Hedge Funds Aren’t Crazy About It, Insider Sentiment Unchanged

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What should a Parker Drilling Company (NYSE:PKD) investor do?

To many of your fellow readers, hedge funds are assumed to be bloated, old investment vehicles of a period lost to current times. Although there are over 8,000 hedge funds trading today, this site focuses on the masters of this group, around 525 funds. It is assumed that this group controls the majority of all hedge funds’ total assets, and by paying attention to their highest performing stock picks, we’ve unearthed a number of investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outpaced 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 topped the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).

Just as useful, positive insider trading sentiment is a second way to look at the stock market universe. There are a number of stimuli for an insider to sell shares of his or her company, but just one, very simple reason why they would buy. Various empirical studies have demonstrated the impressive potential of this strategy if investors understand where to look (learn more here).

Parker Drilling Company

Now that that’s out of the way, it’s important to analyze the newest info about Parker Drilling Company (NYSE:PKD).

How have hedgies been trading Parker Drilling Company (NYSE:PKD)?

At Q2’s end, a total of 16 of the hedge funds we track were bullish in this stock, a change of -20% from the previous quarter. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were increasing their stakes considerably.

When using filings from the hedgies we track, Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital had the most valuable position in Parker Drilling Company (NYSE:PKD), worth close to $14.1 million, accounting for 0.6% of its total 13F portfolio. The second largest stake is held by AQR Capital Management, managed by Cliff Asness, which held a $11.4 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism include Joel Greenblatt’s Gotham Asset Management, Thomas M. Fitzgerald’s Longbow Capital Partners and Warren Lichtenstein’s Steel Partners.

As Parker Drilling Company (NYSE:PKD) has witnessed dropping sentiment from upper-tier hedge fund managers, it’s safe to say that there exists a select few hedgies who sold off their full holdings last quarter. It’s worth mentioning that Boaz Weinstein’s Saba Capital dropped the biggest stake of the 450+ funds we monitor, comprising about $3 million in stock, and Israel Englander of Millennium Management was right behind this move, as the fund sold off about $1 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 4 funds last quarter.

Insider trading activity in Parker Drilling Company (NYSE:PKD)

Insider buying is at its handiest when the primary stock in question has experienced transactions within the past six months. Over the last half-year time frame, Parker Drilling Company (NYSE:PKD) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll check out the relationship between both of these indicators in other stocks similar to Parker Drilling Company (NYSE:PKD). These stocks are Magnum Hunter Resources Corp (NYSE:MHR), Advantage Oil & Gas Ltd (USA) (NYSE:AAV), SandRidge Mississippian Trust II (NYSE:SDR), Vantage Drilling Company (NYSEAMEX:VTG), and Pioneer Energy Services Corp (NYSE:PES). All of these stocks are in the oil & gas drilling & exploration industry and their market caps are similar to PKD’s market cap.

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