Is Devon Energy Corp (NYSE:DVN) an excellent investment today? Hedge funds are in a bearish mood. The number of long hedge fund bets fell by 12 recently.
At the moment, there are many metrics shareholders can use to monitor Mr. Market. Two of the most innovative 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 money managers can outperform the broader indices by a significant margin (see just how much).
Just as key, optimistic insider trading activity is another way to break down the world of equities. Obviously, there are many reasons for a bullish insider to drop shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Many academic studies have demonstrated the market-beating potential of this tactic if “monkeys” know what to do (learn more here).
Now, it’s important to take a look at the recent action surrounding Devon Energy Corp (NYSE:DVN).
What does the smart money think about Devon Energy Corp (NYSE:DVN)?
At the end of the fourth quarter, a total of 40 of the hedge funds we track held long positions in this stock, a change of -23% from the third quarter. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their stakes considerably.
According to our comprehensive database, International Value Advisers, managed by Charles de Vaulx, holds the biggest position in Devon Energy Corp (NYSE:DVN). International Value Advisers has a $290 million position in the stock, comprising 6.5% of its 13F portfolio. Sitting at the No. 2 spot is First Eagle Investment Management, managed by Jean-Marie Eveillard, which held a $277 million position; 0.9% of its 13F portfolio is allocated to the stock. Other hedgies with similar optimism include Edgar Wachenheim’s Greenhaven Associates, Martin Whitman’s Third Avenue Management and Ric Dillon’s Diamond Hill Capital.
Since Devon Energy Corp (NYSE:DVN) has experienced bearish sentiment from the smart money, logic holds that there were a few funds that slashed their entire stakes heading into 2013. It’s worth mentioning that Louis Bacon’s Moore Global Investments cut the largest investment of all the hedgies we watch, valued at an estimated $19 million in stock., and John Kleinheinz of Kleinheinz Capital Partners was right behind this move, as the fund dropped about $15 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 12 funds heading into 2013.
What have insiders been doing with Devon Energy Corp (NYSE:DVN)?
Insider buying is best served when the primary stock in question has seen transactions within the past half-year. Over the last half-year time frame, Devon Energy Corp (NYSE:DVN) has experienced zero unique insiders buying, and 2 insider sales (see the details of insider trades here).
With the results shown by Insider Monkey’s tactics, retail investors must always monitor hedge fund and insider trading activity, and Devon Energy Corp (NYSE:DVN) is an important part of this process.
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