Hedge Funds Aren’t Crazy About Canadian Natural Resource Ltd (USA) (NYSE:CNQ) Anymore

Canadian Natural Resource Ltd (USA) (NYSE:CNQ) was in 29 hedge funds’ portfolio at the end of December. CNQ investors should pay attention to a decrease in activity from the world’s largest hedge funds lately. There were 30 hedge funds in our database with CNQ holdings at the end of the previous quarter.

Canadian Natural Resource Ltd (USA) (NYSE:CNQ)According to most investors, hedge funds are seen as underperforming, outdated financial vehicles of the past. While there are more than 8000 funds in operation at present, we choose to focus on the top tier of this club, close to 450 funds. It is estimated that this group controls the lion’s share of the smart money’s total asset base, and by keeping an eye on their best picks, we have unearthed a number of investment strategies that have historically outpaced the market. 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 started sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).

Equally as key, optimistic insider trading activity is another way to parse down the stock market universe. Just as you’d expect, there are a variety of stimuli for an insider to cut shares of his or her company, but only one, very clear reason why they would buy. Many 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, we’re going to take a glance at the recent action encompassing Canadian Natural Resource Ltd (USA) (NYSE:CNQ).

What does the smart money think about Canadian Natural Resource Ltd (USA) (NYSE:CNQ)?

At the end of the fourth quarter, a total of 29 of the hedge funds we track were bullish in this stock, a change of -3% from the previous quarter. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their stakes substantially.

When looking at the hedgies we track, Jonathon Jacobson’s Highfields Capital Management had the largest position in Canadian Natural Resource Ltd (USA) (NYSE:CNQ), worth close to $515 million, comprising 5.7% of its total 13F portfolio. Coming in second is First Eagle Investment Management, managed by Jean-Marie Eveillard, which held a $283 million position; 1% of its 13F portfolio is allocated to the company. Remaining peers with similar optimism include Thomas E. Claugus’s GMT Capital, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Daniel Bubis’s Tetrem Capital Management.

Seeing as Canadian Natural Resource Ltd (USA) (NYSE:CNQ) has witnessed falling interest from the entirety of the hedge funds we track, we can see that there is a sect of hedgies who sold off their positions entirely at the end of the year. Intriguingly, Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC cut the biggest stake of the 450+ funds we watch, totaling close to $171 million in stock., and Israel Englander of Millennium Management was right behind this move, as the fund dumped about $41 million worth. These transactions are important to note, as total hedge fund interest was cut by 1 funds at the end of the year.

How have insiders been trading Canadian Natural Resource Ltd (USA) (NYSE:CNQ)?

Insider purchases made by high-level executives is particularly usable when the company in question has seen transactions within the past 180 days. Over the latest half-year time frame, Canadian Natural Resource Ltd (USA) (NYSE:CNQ) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

With the results shown by Insider Monkey’s tactics, everyday investors should always pay attention to hedge fund and insider trading sentiment, and Canadian Natural Resource Ltd (USA) (NYSE:CNQ) is an important part of this process.

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Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.