Is Vanguard Natural Resources, LLC (NYSE:VNR) a worthy investment today? The smart money is in a bullish mood. The number of long hedge fund positions went up by 1 lately.
If you’d ask most traders, hedge funds are viewed as slow, outdated financial vehicles of the past. While there are over 8000 funds with their doors open at the moment, we choose to focus on the crème de la crème of this group, about 450 funds. Most estimates calculate that this group has its hands on the majority of all hedge funds’ total capital, and by paying attention to their top picks, we have unearthed a few investment strategies that have historically outperformed the S&P 500 index. 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 started sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Equally as integral, positive insider trading sentiment is a second way to break down the marketplace. There are a variety of reasons for a corporate insider to cut shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the market-beating potential of this tactic if “monkeys” know what to do (learn more here).
Consequently, it’s important to take a peek at the recent action surrounding Vanguard Natural Resources, LLC (NYSE:VNR).
How are hedge funds trading Vanguard Natural Resources, LLC (NYSE:VNR)?
In preparation for this year, a total of 4 of the hedge funds we track were long in this stock, a change of 33% from one quarter earlier. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their holdings meaningfully.
Of the funds we track, Richard Driehaus’s Driehaus Capital had the largest position in Vanguard Natural Resources, LLC (NYSE:VNR), worth close to $2.2 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by Scott Scher & Michael Prober of Clovis Capital Management, with a $1 million position; 0.3% of its 13F portfolio is allocated to the company. Some other hedgies with similar optimism include Ken Griffin’s Citadel Investment Group, Robert B. Gillam’s McKinley Capital Management and Ken Griffin’s Citadel Investment Group.
As aggregate interest increased, key money managers have jumped into Vanguard Natural Resources, LLC (NYSE:VNR) headfirst. Clovis Capital Management, managed by Scott Scher & Michael Prober, initiated the largest position in Vanguard Natural Resources, LLC (NYSE:VNR). Clovis Capital Management had 1 million invested in the company at the end of the quarter. Robert B. Gillam’s McKinley Capital Management also initiated a $0.5 million position during the quarter.
How have insiders been trading Vanguard Natural Resources, LLC (NYSE:VNR)?
Insider purchases made by high-level executives is at its handiest when the company in focus has experienced transactions within the past half-year. Over the latest six-month time frame, Vanguard Natural Resources, LLC (NYSE:VNR) has experienced 3 unique insiders buying, and 2 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Vanguard Natural Resources, LLC (NYSE:VNR). These stocks are EV Energy Partners, L.P. (NASDAQ:EVEP), Unit Corporation (NYSE:UNT), Pacific Drilling SA (NYSE:PACD), Ocean Rig UDW Inc (NASDAQ:ORIG), and BreitBurn Energy Partners L.P. (NASDAQ:BBEP). This group of stocks are in the oil & gas drilling & exploration industry and their market caps match VNR’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| EV Energy Partners, L.P. (NASDAQ:EVEP) | 3 | 0 | 0 |
| Unit Corporation (NYSE:UNT) | 9 | 0 | 5 |
| Pacific Drilling SA (NYSE:PACD) | 10 | 0 | 0 |
| Ocean Rig UDW Inc (NASDAQ:ORIG) | 5 | 0 | 0 |
| BreitBurn Energy Partners L.P. (NASDAQ:BBEP) | 5 | 0 | 3 |
With the results demonstrated by our tactics, retail investors should always keep an eye on hedge fund and insider trading sentiment, and Vanguard Natural Resources, LLC (NYSE:VNR) is an important part of this process.
