Is Bill Barrett Corporation (NYSE:BBG) a buy here? Hedge funds are getting less optimistic. The number of long hedge fund bets dropped by 2 in recent months.
If you’d ask most shareholders, hedge funds are perceived as underperforming, old financial tools of yesteryear. While there are over 8000 funds with their doors open today, we look at the leaders of this group, close to 450 funds. It is widely believed that this group has its hands on the majority of the smart money’s total capital, and by keeping an eye on their best investments, we have uncovered a number of investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum 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 25 percentage points in 6.5 month (see all of our picks from August).
Just as beneficial, positive insider trading sentiment is a second way to break down the marketplace. Just as you’d expect, there are lots of motivations for an upper level exec to downsize shares of his or her company, but only one, very clear reason why they would buy. Several academic studies have demonstrated the valuable potential of this method if you know where to look (learn more here).
Now, it’s important to take a peek at the key action encompassing Bill Barrett Corporation (NYSE:BBG).
Hedge fund activity in Bill Barrett Corporation (NYSE:BBG)
At the end of the fourth quarter, a total of 13 of the hedge funds we track were long in this stock, a change of -13% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their stakes meaningfully.
Of the funds we track, SAC Capital Advisors, managed by Steven Cohen, holds the most valuable position in Bill Barrett Corporation (NYSE:BBG). SAC Capital Advisors has a $58 million position in the stock, comprising 0.3% of its 13F portfolio. The second largest stake is held by Citadel Investment Group, managed by Ken Griffin, which held a $20 million position; the fund has 0% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Bruce J. Richards and Louis Hanover’s Marathon Asset Management, Israel Englander’s Millennium Management and James Dondero’s Highland Capital Management.
Since Bill Barrett Corporation (NYSE:BBG) has witnessed bearish sentiment from the smart money, it’s safe to say that there was a specific group of fund managers that decided to sell off their entire stakes at the end of the year. It’s worth mentioning that Mark Travis’s Intrepid Capital Management said goodbye to the largest investment of the 450+ funds we track, valued at an estimated $37 million in stock.. Jim Simons’s fund, Renaissance Technologies, also dropped its stock, about $11 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 2 funds at the end of the year.
What have insiders been doing with Bill Barrett Corporation (NYSE:BBG)?
Insider buying is most useful when the company in focus has seen transactions within the past six months. Over the last half-year time period, Bill Barrett Corporation (NYSE:BBG) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Bill Barrett Corporation (NYSE:BBG). These stocks are Crestwood Midstream Partners LP (NYSE:CMLP), Rex Energy Corporation (NASDAQ:REXX), W&T Offshore, Inc. (NYSE:WTI), Northern Oil & Gas, Inc. (NYSEAMEX:NOG), and Approach Resources Inc. (NASDAQ:AREX). This group of stocks are the members of the oil & gas drilling & exploration industry and their market caps are closest to BBG’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Crestwood Midstream Partners LP (NYSE:CMLP)||2||0||0|
|Rex Energy Corporation (NASDAQ:REXX)||4||1||1|
|W&T Offshore, Inc. (NYSE:WTI)||10||2||0|
|Northern Oil & Gas, Inc. (NYSEAMEX:NOG)||7||0||1|
|Approach Resources Inc. (NASDAQ:AREX)||5||0||0|
With the results demonstrated by Insider Monkey’s research, everyday investors should always watch hedge fund and insider trading activity, and Bill Barrett Corporation (NYSE:BBG) applies perfectly to this mantra.
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.