Magnum Hunter Resources Corp (NYSE:MHR) was in 6 hedge funds’ portfolio at the end of the fourth quarter of 2012. MHR has seen a decrease in hedge fund sentiment recently. There were 7 hedge funds in our database with MHR positions at the end of the previous quarter.
According to most traders, hedge funds are perceived as slow, old investment vehicles of yesteryear. While there are more than 8000 funds trading at present, we at Insider Monkey hone in on the top tier of this group, close to 450 funds. It is widely believed that this group controls the lion’s share of the smart money’s total capital, and by monitoring their best equity investments, we have brought to light a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy beat 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 trumped the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Just as beneficial, positive insider trading sentiment is another way to parse down the investments you’re interested in. Just as you’d expect, there are a variety of motivations for a bullish insider to downsize shares of his or her company, but just one, very obvious reason why they would buy. Many academic studies have demonstrated the useful potential of this strategy if shareholders know what to do (learn more here).
With these “truths” under our belt, it’s important to take a peek at the key action surrounding Magnum Hunter Resources Corp (NYSE:MHR).
What does the smart money think about Magnum Hunter Resources Corp (NYSE:MHR)?
At the end of the fourth quarter, a total of 6 of the hedge funds we track were long in this stock, a change of -14% from the third quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their holdings considerably.
According to our comprehensive database, Millennium Management, managed by Israel Englander, holds the most valuable position in Magnum Hunter Resources Corp (NYSE:MHR). Millennium Management has a $2.3 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Gregory Fraser, Rudolph Kluiber, and Timothy Kroch of GRT Capital Partners, with a $1.7 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include Steven Cohen’s SAC Capital Advisors, Russell Lucas’s Lucas Capital Management and Ken Griffin’s Citadel Investment Group.
Because Magnum Hunter Resources Corp (NYSE:MHR) has witnessed falling interest from the aggregate hedge fund industry, it’s safe to say that there is a sect of hedge funds who sold off their full holdings last quarter. Interestingly, Thomas E. Claugus’s GMT Capital said goodbye to the biggest position of the “upper crust” of funds we track, valued at close to $0.3 million in stock., and Neil Chriss of Hutchin Hill Capital was right behind this move, as the fund dropped about $0.1 million worth. These transactions are important to note, as total hedge fund interest dropped by 1 funds last quarter.
How have insiders been trading Magnum Hunter Resources Corp (NYSE:MHR)?
Bullish insider trading is at its handiest when the company we’re looking at has experienced transactions within the past 180 days. Over the last 180-day time period, Magnum Hunter Resources Corp (NYSE:MHR) has experienced 2 unique insiders purchasing, and 3 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 Magnum Hunter Resources Corp (NYSE:MHR). These stocks are Pioneer Southwest Energy Partners L.P. (NYSE:PSE), Vantage Drilling Company (NYSEAMEX:VTG), Advantage Oil & Gas Ltd (USA) (NYSE:AAV), and Bellatrix Exploration Ltd Ordinary Shares (Canada) (NYSEAMEX:BXE). This group of stocks belong to the oil & gas drilling & exploration industry and their market caps are closest to MHR’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Pioneer Southwest Energy Partners L.P. (NYSE:PSE) | 2 | 1 | 0 |
| Vantage Drilling Company (NYSEAMEX:VTG) | 9 | 0 | 1 |
| Advantage Oil & Gas Ltd (USA) (NYSE:AAV) | 5 | 0 | 0 |
| Bellatrix Exploration Ltd Ordinary Shares (Canada) (NYSEAMEX:BXE) | 4 | 0 | 0 |
With the returns demonstrated by our strategies, everyday investors should always monitor hedge fund and insider trading sentiment, and Magnum Hunter Resources Corp (NYSE:MHR) is an important part of this process.
