It’s a green day on Wall Street as all three major indexes are in the green. The markets are also calm as the VIX fear index is below 14 and crude oil is up bytp around 2%. In this article, we take a closer look at some of the stocks more volatile than most today, including Transocean LTD (NYSE:RIG), Seadrill Ltd (NYSE:SDRL), Fairmount Santrol Holdings Inc (NYSE:FMSA), Chimera Investment Corporation (NYSE:CIM), and Yingli Green Energy Holding Co Ltd (ADR) (NYSE:YGE). We will also use 13-F filing data to see how the world’s greatest investors are positioned in each stock.
At Insider Monkey, we track around 760 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on, can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see the details here).
Offshore Drillers Surge on Rallying Crude Prices
It seems that traders are piling into the offshore drilling market today as Transocean LTD (NYSE:RIG) and Seadrill Ltd (NYSE:SDRL) are up by 10% and 8% respectively. Brent spot futures have popped 1.8% and are now above $50 per barrel in afternoon trading as some traders anticipate Friday’s dismal payroll report might lead the Federal Reserve to hold off on raising interest rates during this month’s FOMC meeting. If the Fed holds rates low, the U.S. dollar might not strengthen as much as expected, and crude prices could have more room to rally if various supply disruptions around the world continue. Although offshore drillers need considerably higher Brent prices than $50 for demand to meaningfully tick up, the sector has been beaten up and crude prices are notoriously difficult to predict. Carl Icahn’s Icahn Capital LP owned 21.4 million shares of Transocean LTD (NYSE:RIG) and Jim Simons’ Renaissance Technologies owned almost 1.5 million shares of Seadrill Ltd (NYSE:SDRL) at the end of March.
On the next page, we examine Fairmount Santrol Holdings, Chimera Investment Corporation, and Yingli Green Energy Holding.