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Hedge Funds Are Crazy About CARBO Ceramics Inc. (NYSE:CRR)

CARBO Ceramics Inc. (NYSE:CRR) was in 13 hedge funds’ portfolio at the end of the fourth quarter of 2012. CRR investors should be aware of an increase in enthusiasm from smart money lately. There were 10 hedge funds in our database with CRR positions at the end of the previous quarter.

CARBO Ceramics Inc.

In the 21st century investor’s toolkit, there are many metrics market participants can use to watch publicly traded companies. A couple of the best are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite fund managers can outpace the broader indices by a superb margin (see just how much).

Equally as important, bullish insider trading activity is another way to parse down the marketplace. There are plenty of motivations for a corporate insider to drop shares of his or her company, but only one, very obvious reason why they would behave bullishly. Plenty of empirical studies have demonstrated the impressive potential of this method if piggybackers know what to do (learn more here).

With these “truths” under our belt, it’s important to take a gander at the recent action surrounding CARBO Ceramics Inc. (NYSE:CRR).

How are hedge funds trading CARBO Ceramics Inc. (NYSE:CRR)?

At the end of the fourth quarter, a total of 13 of the hedge funds we track held long positions in this stock, a change of 30% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their stakes significantly.

Of the funds we track, Royce & Associates, managed by Chuck Royce, holds the largest position in CARBO Ceramics Inc. (NYSE:CRR). Royce & Associates has a $45 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Tom Gayner of Markel Gayner Asset Management, with a $14 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Remaining peers that are bullish include D. E. Shaw’s D E Shaw, Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital and Gregory Fraser, Rudolph Kluiber, and Tim Krochuk’s GRT Capital Partners.

As one would reasonably expect, some big names have been driving this bullishness. Blue Mountain Capital, managed by Andrew Feldstein and Stephen Siderow, created the largest position in CARBO Ceramics Inc. (NYSE:CRR). Blue Mountain Capital had 3 million invested in the company at the end of the quarter. Anthony Giammalva’s Sound Energy Partners also initiated a $1 million position during the quarter. The following funds were also among the new CRR investors: Jeffrey Vinik’s Vinik Asset Management, John Overdeck and David Siegel’s Two Sigma Advisors, and Israel Englander’s Millennium Management.

What have insiders been doing with CARBO Ceramics Inc. (NYSE:CRR)?

Bullish insider trading is particularly usable when the company in question has seen transactions within the past six months. Over the latest 180-day time period, CARBO Ceramics Inc. (NYSE:CRR) has experienced 1 unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to CARBO Ceramics Inc. (NYSE:CRR). These stocks are Energy XXI (Bermuda) Limited (NASDAQ:EXXI), Lufkin Industries, Inc. (NASDAQ:LUFK), Helix Energy Solutions Group Inc. (NYSE:HLX), Exterran Holdings, Inc. (NYSE:EXH), and Precision Drilling Corp (USA) (NYSE:PDS). All of these stocks are in the oil & gas equipment & services industry and their market caps resemble CRR’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Energy XXI (Bermuda) Limited (NASDAQ:EXXI) 21 5 5
Lufkin Industries, Inc. (NASDAQ:LUFK) 9 0 0
Helix Energy Solutions Group Inc. (NYSE:HLX) 11 0 6
Exterran Holdings, Inc. (NYSE:EXH) 16 0 6
Precision Drilling Corp (USA) (NYSE:PDS) 13 0 0

With the results exhibited by Insider Monkey’s studies, retail investors should always monitor hedge fund and insider trading sentiment, and CARBO Ceramics Inc. (NYSE:CRR) is no exception.

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