Is Chesapeake Energy Corporation (NYSE:CHK) a healthy stock for your portfolio? Prominent investors are in an optimistic mood. The number of long hedge fund bets advanced by 1 recently.
To the average investor, there are tons of indicators shareholders can use to track their holdings. Some of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top fund managers can outperform the market by a healthy margin (see just how much).
Just as integral, optimistic insider trading sentiment is another way to break down the world of equities. As the old adage goes: there are plenty of incentives for an executive to get rid of shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several empirical studies have demonstrated the useful potential of this tactic if shareholders understand what to do (learn more here).
Now, it’s important to take a glance at the latest action regarding Chesapeake Energy Corporation (NYSE:CHK).
Hedge fund activity in Chesapeake Energy Corporation (NYSE:CHK)
In preparation for this year, a total of 38 of the hedge funds we track held long positions in this stock, a change of 3% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were increasing their holdings considerably.
According to our comprehensive database, Southeastern Asset Management, managed by Mason Hawkins, holds the biggest position in Chesapeake Energy Corporation (NYSE:CHK). Southeastern Asset Management has a $1.4207 billion position in the stock, comprising 6.2% of its 13F portfolio. On Southeastern Asset Management’s heels is Icahn Capital LP, managed by Carl Icahn, which held a $992.2 million position; the fund has 7.7% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include Mohnish Pabrai’s Mohnish Pabrai, D. E. Shaw’s D E Shaw and Jeffrey Vinik’s Vinik Asset Management.
As one would reasonably expect, specific money managers have been driving this bullishness. Caxton Associates LP, managed by Bruce Kovner, created the most outsized call position in Chesapeake Energy Corporation (NYSE:CHK). Caxton Associates LP had 16.6 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $10.7 million investment in the stock during the quarter. The other funds with brand new CHK positions are Richard Chilton’s Chilton Investment Company, Gregory Fraser, Rudolph Kluiber, and Timothy Kroch’s GRT Capital Partners, and John Fichthorn’s Dialectic Capital Management.
How have insiders been trading Chesapeake Energy Corporation (NYSE:CHK)?
Insider purchases made by high-level executives is best served when the company we’re looking at has experienced transactions within the past half-year. Over the latest 180-day time period, Chesapeake Energy Corporation (NYSE:CHK) has experienced 2 unique insiders purchasing, and 2 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Chesapeake Energy Corporation (NYSE:CHK). These stocks are Talisman Energy Inc. (USA) (NYSE:TLM), Nexen Inc. (USA) (NYSE:NXY), Cabot Oil & Gas Corporation (NYSE:COG), Southwestern Energy Company (NYSE:SWN), and Range Resources Corp. (NYSE:RRC). All of these stocks are in the independent oil & gas industry and their market caps are similar to CHK’s market cap.