Is Cimarex Energy Co (NYSE:XEC) a good investment?
To many traders, hedge funds are viewed as bloated, old financial tools of a forgotten age. Although there are In excess of 8,000 hedge funds trading today, Insider Monkey focuses on the masters of this club, close to 525 funds. It is assumed that this group oversees the lion’s share of all hedge funds’ total capital, and by tracking their best picks, we’ve spotted a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outperformed 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 outpaced the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).
Equally as useful, bullish insider trading activity is another way to analyze the stock market universe. There are a variety of reasons for a bullish insider to drop shares of his or her company, but just one, very clear reason why they would buy. Several empirical studies have demonstrated the useful potential of this method if investors understand what to do (learn more here).
Furthermore, let’s analyze the latest info for Cimarex Energy Co (NYSE:XEC).
How are hedge funds trading Cimarex Energy Co (NYSE:XEC)?
At the end of the second quarter, a total of 24 of the hedge funds we track held long positions in this stock, a change of 20% from one quarter earlier. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their holdings considerably.
Out of the hedge funds we follow, Natixis Global Asset Management’s Harris Associates had the most valuable position in Cimarex Energy Co (NYSE:XEC), worth close to $376.7 million, comprising 0.8% of its total 13F portfolio. The second largest stake is held by Citadel Investment Group, managed by Ken Griffin, which held a $251.9 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Ric Dillon’s Diamond Hill Capital, Chuck Royce’s Royce & Associates and Charles de Vaulx’s International Value Advisers.
With a general bullishness amongst the titans, particular hedge funds have jumped into Cimarex Energy Co (NYSE:XEC) headfirst. Citadel Investment Group, managed by Ken Griffin, initiated the most valuable position in Cimarex Energy Co (NYSE:XEC). Citadel Investment Group had 251.9 million invested in the company at the end of the quarter. Ric Dillon’s Diamond Hill Capital also made a $79.2 million investment in the stock during the quarter. The other funds with brand new XEC positions are Chuck Royce’s Royce & Associates, Charles de Vaulx’s International Value Advisers, and Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC.
How are insiders trading Cimarex Energy Co (NYSE:XEC)?
Bullish insider trading is at its handiest when the company we’re looking at has experienced transactions within the past 180 days. Over the latest 180-day time period, Cimarex Energy Co (NYSE:XEC) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll check out the relationship between both of these indicators in other stocks similar to Cimarex Energy Co (NYSE:XEC). These stocks are Linn Energy LLC (NASDAQ:LINE), National Fuel Gas Co. (NYSE:NFG), Baytex Energy Corp (USA) (NYSE:BTE), Denbury Resources Inc. (NYSE:DNR), and Plains Exploration & Production Company (NYSE:PXP). All of these stocks are in the independent oil & gas industry and their market caps are similar to XEC’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Linn Energy LLC (NASDAQ:LINE)||10||0||0|
|National Fuel Gas Co. (NYSE:NFG)||16||0||0|
|Baytex Energy Corp (USA) (NYSE:BTE)||9||0||0|
|Denbury Resources Inc. (NYSE:DNR)||21||0||0|
|Plains Exploration & Production Company (NYSE:PXP)||43||0||0|
Using the results shown by our research, average investors should always keep one eye on hedge fund and insider trading activity, and Cimarex Energy Co (NYSE:XEC) shareholders fit into this picture quite nicely.