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This Metric Says You Are Smart to Sell Apache Corporation (NYSE:APA)

Apache Corporation (NYSE:APA) was in 34 hedge funds’ portfolio at the end of the fourth quarter of 2012. apa shareholders have witnessed a decrease in activity from the world’s largest hedge funds lately. There were 40 hedge funds in our database with apa holdings at the end of the previous quarter.

Apache Corporation (NYSE:APA)

According to most traders, hedge funds are seen as unimportant, old investment vehicles of the past. While there are over 8000 funds trading at present, we at Insider Monkey hone in on the crème de la crème of this group, close to 450 funds. Most estimates calculate that this group controls the majority of the hedge fund industry’s total capital, and by monitoring their top stock picks, we have deciphered 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 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 beaten the S&P 500 index by 25 percentage points in 6.5 month (see the details here).

Equally as important, optimistic insider trading sentiment is another way to parse down the financial markets. Obviously, there are a variety of stimuli for an upper level exec to drop shares of his or her company, but only one, very simple reason why they would initiate a purchase. Plenty of academic studies have demonstrated the valuable potential of this method if shareholders understand where to look (learn more here).

Now, let’s take a glance at the key action encompassing Apache Corporation (NYSE:APA).

What have hedge funds been doing with Apache Corporation (NYSE:APA)?

Heading into 2013, a total of 34 of the hedge funds we track were long in this stock, a change of -15% from the third quarter. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were increasing their stakes meaningfully.

When looking at the hedgies we track, Eagle Capital Management, managed by Boykin Curry, holds the largest position in Apache Corporation (NYSE:APA). Eagle Capital Management has a $359 million billion position in the stock, comprising 2.6% of its 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, managed by Ken Griffin, which held a $201 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include Jean-Marie Eveillard’s First Eagle Investment Management, Ric Dillon’s Diamond Hill Capital and Thomas E. Claugus’s GMT Capital.

Judging by the fact that Apache Corporation (NYSE:APA) has faced a declination in interest from the smart money, it’s safe to say that there was a specific group of funds that slashed their positions entirely heading into 2013. Interestingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dumped the largest position of the 450+ funds we watch, totaling about $43 million in stock.. Andrew Hall’s fund, Astenbeck Capital Management, also said goodbye to its stock, about $14 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 6 funds heading into 2013.

What do corporate executives and insiders think about Apache Corporation (NYSE:APA)?

Bullish insider trading is best served when the company in question has seen transactions within the past half-year. Over the last six-month time frame, Apache Corporation (NYSE:APA) has experienced 4 unique insiders purchasing, and zero insider sales (see the details of insider trades here).

With the results demonstrated by Insider Monkey’s time-tested strategies, retail investors should always pay attention to hedge fund and insider trading sentiment, and Apache Corporation (NYSE:APA) applies perfectly to this mantra.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

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