Is Harvest Natural Resources, Inc. (NYSE:HNR) a good investment?
If you were to ask many of your fellow readers, hedge funds are assumed to be delayed, old financial tools of an era lost to time. Although there are more than 8,000 hedge funds with their doors open today, this site focuses on the elite of this group, about 525 funds. It is assumed that this group controls most of all hedge funds’ total capital, and by monitoring their best investments, we’ve found a number of investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outpaced 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 topped the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).
Just as necessary, positive insider trading sentiment is a second way to look at the stock market universe. Obviously, there are a variety of incentives for an executive to cut shares of his or her company, but just one, very clear reason why they would behave bullishly. Plenty of academic studies have demonstrated the market-beating potential of this tactic if “monkeys” understand where to look (learn more here).
What’s more, let’s analyze the recent info about Harvest Natural Resources, Inc. (NYSE:HNR).
How are hedge funds trading Harvest Natural Resources, Inc. (NYSE:HNR)?
In preparation for the third quarter, a total of 14 of the hedge funds we track held long positions in this stock, a change of -18% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their stakes significantly.
Out of the hedge funds we follow, Glenhill Advisors, managed by Glenn J. Krevlin, holds the most valuable position in Harvest Natural Resources, Inc. (NYSE:HNR). Glenhill Advisors has a $8.6 million position in the stock, comprising 1% of its 13F portfolio. Sitting at the No. 2 spot is Scoggin, managed by Curtis Schenker and Craig Effron, which held a $4 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Other peers with similar optimism include Howard Guberman’s Gruss Asset Management, Jim Simons’s Renaissance Technologies and Andrew Wallach’s Cumberland Associates.
Judging by the fact that Harvest Natural Resources, Inc. (NYSE:HNR) has faced bearish sentiment from upper-tier hedge fund managers, it’s easy to see that there lies a certain “tier” of money managers who were dropping their full holdings heading into Q2. At the top of the heap, Wayne Cooperman’s Cobalt Capital Management sold off the largest position of the 450+ funds we watch, totaling an estimated $1.1 million in stock. Paul Tudor Jones’s fund, Tudor Investment Corp, also dumped its stock, about $0.7 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 3 funds heading into Q2.
How are insiders trading Harvest Natural Resources, Inc. (NYSE:HNR)?
Legal insider trading, particularly when it’s bullish, is particularly usable when the company we’re looking at has experienced transactions within the past 180 days. Over the latest 180-day time frame, Harvest Natural Resources, Inc. (NYSE:HNR) has experienced zero unique insiders purchasing, 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 Harvest Natural Resources, Inc. (NYSE:HNR). These stocks are Gastar Exploration Limited (USA) (NYSEAMEX:GST), Callon Petroleum Company (NYSE:CPE), Crimson Exploration Inc. (NASDAQ:CXPO), Equal Energy Ltd. (USA) (NYSE:EQU), and Endeavour International Corporation (NYSE:END). This group of stocks belong to the independent oil & gas industry and their market caps are closest to HNR’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Gastar Exploration Limited (USA) (NYSEAMEX:GST) | 4 | 0 | 0 |
| Callon Petroleum Company (NYSE:CPE) | 8 | 0 | 0 |
| Crimson Exploration Inc. (NASDAQ:CXPO) | 6 | 0 | 0 |
| Equal Energy Ltd. (USA) (NYSE:EQU) | 3 | 0 | 0 |
| Endeavour International Corporation (NYSE:END) | 5 | 0 | 0 |
Using the results demonstrated by the previously mentioned strategies, average investors should always track hedge fund and insider trading sentiment, and Harvest Natural Resources, Inc. (NYSE:HNR) applies perfectly to this mantra.
