Anadarko Petroleum Corporation (NYSE:APC) has experienced a decrease in enthusiasm from smart money of late.
In the eyes of most market participants, hedge funds are seen as slow, old investment vehicles of the past. While there are more than 8000 funds with their doors open today, we at Insider Monkey hone in on the elite of this group, about 450 funds. Most estimates calculate that this group controls the majority of the smart money’s total capital, and by tracking their best picks, we have found a few investment strategies that have historically beaten Mr. Market. 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 25 percentage points in 6.5 month (explore the details and some picks here).
Equally as important, bullish insider trading activity is a second way to parse down the financial markets. Obviously, there are a number of incentives for a corporate insider to get rid of shares of his or her company, but only one, very obvious reason why they would behave bullishly. Plenty of academic studies have demonstrated the useful potential of this tactic if investors understand what to do (learn more here).
Keeping this in mind, it’s important to take a look at the latest action surrounding Anadarko Petroleum Corporation (NYSE:APC).
How have hedgies been trading Anadarko Petroleum Corporation (NYSE:APC)?
Heading into 2013, a total of 62 of the hedge funds we track were long in this stock, a change of -9% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their holdings substantially.
When looking at the hedgies we track, Highfields Capital Management, managed by Jonathon Jacobson, holds the most valuable position in Anadarko Petroleum Corporation (NYSE:APC). Highfields Capital Management has a $306 million billion position in the stock, comprising 3.4% of its 13F portfolio. The second largest stake is held by D E Shaw, managed by D. E. Shaw, which held a $291 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Some other hedgies with similar optimism include , Ken Griffin’s Citadel Investment Group and .
Since Anadarko Petroleum Corporation (NYSE:APC) has faced bearish sentiment from hedge fund managers, logic holds that there exists a select few money managers that decided to sell off their positions entirely at the end of the year. At the top of the heap, Kenneth Mario Garschina’s Mason Capital Management sold off the biggest stake of all the hedgies we track, worth an estimated $160 million in stock.. Doug Silverman’s fund, Senator Investment Group, also dropped its call options., about $49 million worth. These transactions are important to note, as total hedge fund interest fell by 6 funds at the end of the year.
Insider trading activity in Anadarko Petroleum Corporation (NYSE:APC)
Insider trading activity, especially when it’s bullish, is best served when the company in focus has seen transactions within the past 180 days. Over the last half-year time frame, Anadarko Petroleum Corporation (NYSE:APC) has seen zero unique insiders buying, and 2 insider sales (see the details of insider trades here).
With the results exhibited by our time-tested strategies, everyday investors should always watch hedge fund and insider trading sentiment, and Anadarko Petroleum Corporation (NYSE:APC) shareholders fit into this picture quite nicely.
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.