Is Resolute Energy Corp (NYSE:REN) worth your attention right now? Hedge funds are taking a bullish view. The number of bullish hedge fund positions increased by 2 recently.
To most stock holders, hedge funds are assumed to be unimportant, outdated investment vehicles of yesteryear. While there are greater than 8000 funds trading at present, we at Insider Monkey choose to focus on the leaders of this group, around 450 funds. It is estimated that this group oversees the majority of the smart money’s total asset base, and by tracking their top stock picks, we have figured out a number of investment strategies that have historically outstripped the 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 25 percentage points in 6.5 month (see the details here).
Equally as important, optimistic insider trading sentiment is another way to parse down the financial markets. There are a number of stimuli for an executive to get rid of shares of his or her company, but only one, very clear reason why they would buy. Several empirical studies have demonstrated the market-beating potential of this method if shareholders understand what to do (learn more here).
Keeping this in mind, let’s take a gander at the recent action regarding Resolute Energy Corp (NYSE:REN).
How have hedgies been trading Resolute Energy Corp (NYSE:REN)?
At year’s end, a total of 12 of the hedge funds we track were bullish in this stock, a change of 20% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their holdings substantially.
When looking at the hedgies we track, SPO Advisory Corp, managed by John H. Scully, holds the largest position in Resolute Energy Corp (NYSE:REN). SPO Advisory Corp has a $89 million position in the stock, comprising 1.4% of its 13F portfolio. On SPO Advisory Corp’s heels is Edward Gilhuly and Scott Stuart of Sageview Capital, with a $17 million position; the fund has 6% of its 13F portfolio invested in the stock. Some other hedgies with similar optimism include John H. Scully’s SPO Advisory Corp, Russell Lucas’s Lucas Capital Management and Chuck Royce’s Royce & Associates.
Now, some big names have jumped into Resolute Energy Corp (NYSE:REN) headfirst. Millennium Management, managed by Israel Englander, created the largest position in Resolute Energy Corp (NYSE:REN). Millennium Management had 0 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also initiated a $0 million position during the quarter. The only other fund with a brand new REN position is Jacob Gottlieb’s Visium Asset Management.
Insider trading activity in Resolute Energy Corp (NYSE:REN)
Bullish insider trading is best served when the primary stock in question has experienced transactions within the past 180 days. Over the latest half-year time frame, Resolute Energy Corp (NYSE:REN) has seen zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Resolute Energy Corp (NYSE:REN). These stocks are Chesapeake Granite Wash Trust (NYSE:CHKR), Memorial Production Partners LP (NASDAQ:MEMP), Delek Logistics Partners LP (NYSE:DKL), Sanchez Energy Corp (NYSE:SN), and San Juan Basin Royalty Trust (NYSE:SJT). This group of stocks are the members of the independent oil & gas industry and their market caps resemble REN’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Chesapeake Granite Wash Trust (NYSE:CHKR)||4||0||0|
|Memorial Production Partners LP (NASDAQ:MEMP)||1||0||0|
|Delek Logistics Partners LP (NYSE:DKL)||1||9||0|
|Sanchez Energy Corp (NYSE:SN)||7||1||3|
|San Juan Basin Royalty Trust (NYSE:SJT)||5||0||0|
With the returns shown by our time-tested strategies, everyday investors must always watch hedge fund and insider trading sentiment, and Resolute Energy Corp (NYSE:REN) is an important part of this process.
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.