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Hedge Funds Are Selling Basic Energy Services, Inc (BAS): Synergy Resources Corp (SYRG), TETRA Technologies, Inc. (TTI)

Basic Energy Services, Inc (NYSE:BAS) shareholders have witnessed a decrease in enthusiasm from smart money in recent months.

Basic Energy Services, Inc (NYSE:BAS)In the eyes of most investors, hedge funds are viewed as slow, outdated investment tools of yesteryear. While there are over 8000 funds with their doors open at the moment, we at Insider Monkey look at the masters of this group, close to 450 funds. It is estimated that this group oversees most of the hedge fund industry’s total capital, and by tracking their top investments, we have figured out a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year 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 beaten the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).

Just as key, optimistic insider trading activity is another way to break down the financial markets. There are lots of reasons for an executive to drop shares of his or her company, but only one, very simple reason why they would initiate a purchase. Various academic studies have demonstrated the market-beating potential of this method if “monkeys” know where to look (learn more here).

With these “truths” under our belt, it’s important to take a glance at the key action encompassing Basic Energy Services, Inc (NYSE:BAS).

What does the smart money think about Basic Energy Services, Inc (NYSE:BAS)?

At the end of the fourth quarter, a total of 9 of the hedge funds we track held long positions in this stock, a change of -10% from the third quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their holdings significantly.

According to our comprehensive database, Chuck Royce’s Royce & Associates had the largest position in Basic Energy Services, Inc (NYSE:BAS), worth close to $8 million, accounting for 0% of its total 13F portfolio. On Royce & Associates’s heels is Jim Simons of Renaissance Technologies, with a $4 million position; the fund has 0% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, D. E. Shaw’s D E Shaw and David Costen Haley’s HBK Investments.

Because Basic Energy Services, Inc (NYSE:BAS) has witnessed bearish sentiment from the smart money, logic holds that there exists a select few fund managers that elected to cut their full holdings last quarter. At the top of the heap, Mike Vranos’s Ellington dropped the largest position of the “upper crust” of funds we track, worth an estimated $1 million in stock., and Cliff Asness of AQR Capital Management was right behind this move, as the fund said goodbye to about $1 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 1 funds last quarter.

What do corporate executives and insiders think about Basic Energy Services, Inc (NYSE:BAS)?

Insider buying is best served when the company in focus has experienced transactions within the past six months. Over the last half-year time period, Basic Energy Services, Inc (NYSE:BAS) has seen 3 unique insiders buying, and 3 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Basic Energy Services, Inc (NYSE:BAS). These stocks are Synergy Resources Corp (NYSEAMEX:SYRG), TETRA Technologies, Inc. (NYSE:TTI), Newpark Resources Inc (NYSE:NR), Willbros Group Inc (NYSE:WG), and Tesco Corporation (USA) (NASDAQ:TESO). This group of stocks are in the oil & gas equipment & services industry and their market caps match BAS’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Synergy Resources Corp (NYSEAMEX:SYRG) 4 2 0
TETRA Technologies, Inc. (NYSE:TTI) 13 7 0
Newpark Resources Inc (NYSE:NR) 8 0 2
Willbros Group Inc (NYSE:WG) 11 0 0
Tesco Corporation (USA) (NASDAQ:TESO) 13 0 2

With the returns demonstrated by the aforementioned tactics, retail investors should always keep an eye on hedge fund and insider trading activity, and Basic Energy Services, Inc (NYSE:BAS) is no exception.

Click here to learn why you should track hedge funds