Penn Virginia Corporation (NYSE:PVA) investors should pay attention to a decrease in activity from the world's largest hedge funds in recent months.
In the eyes of most investors, hedge funds are seen as unimportant, old financial vehicles of yesteryear. While there are over 8000 funds with their doors open at the moment, we at Insider Monkey hone in on the moguls of this group, around 450 funds. Most estimates calculate that this group oversees most of all hedge funds' total asset base, and by keeping an eye on their highest performing stock picks, we have found a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outstripped 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 23.3 percentage points in 8 months (check out a sample of our picks).
Just as key, optimistic insider trading activity is a second way to parse down the world of equities. Obviously, there are lots of stimuli for a bullish insider to cut shares of his or her company, but just one, very clear reason why they would behave bullishly. Many academic studies have demonstrated the impressive potential of this method if investors understand where to look (learn more here).
With these "truths" under our belt, let's take a look at the latest action surrounding Penn Virginia Corporation (NYSE:PVA).
In preparation for this quarter, a total of 12 of the hedge funds we track were long in this stock, a change of -14% from the previous quarter. With the smart money's positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their holdings significantly.
According to our comprehensive database, Ken Griffin's Citadel Investment Group had the biggest position in Penn Virginia Corporation (NYSE:PVA), worth close to $13.7 million, accounting for less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Cliff Asness of AQR Capital Management, with a $10.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds that are bullish include Chuck Royce's Royce & Associates, Robert B. Gillam's McKinley Capital Management and Israel Englander's Millennium Management.
Due to the fact that Penn Virginia Corporation (NYSE:PVA) has experienced falling interest from the smart money, we can see that there is a sect of fund managers that decided to sell off their entire stakes heading into Q2. Intriguingly, Thomas E. Claugus's GMT Capital sold off the biggest investment of the 450+ funds we watch, totaling about $2.6 million in stock., and Mike Vranos of Ellington was right behind this move, as the fund cut about $0.3 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 2 funds heading into Q2.
Bullish insider trading is best served when the company in focus has experienced transactions within the past six months. Over the latest 180-day time period, Penn Virginia Corporation (NYSE:PVA) has seen 1 unique insiders buying, and zero insider sales (see the details of insider trades here).
With the returns exhibited by the aforementioned studies, everyday investors must always monitor hedge fund and insider trading activity, and Penn Virginia Corporation (NYSE:PVA) shareholders fit into this picture quite nicely.