Hess Corp. (NYSE:HES) investors should pay attention to an increase in support from the world’s most elite money managers lately.
To most traders, hedge funds are viewed as unimportant, outdated investment tools of the past. While there are greater than 8000 funds trading at the moment, we at Insider Monkey look at the upper echelon of this group, close to 450 funds. It is estimated that this group controls the majority of the smart money’s total capital, and by tracking their best stock picks, we have come up with a few investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per 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 topped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Just as integral, bullish insider trading sentiment is a second way to parse down the financial markets. As the old adage goes: there are lots of stimuli for a bullish insider to downsize shares of his or her company, but only one, very obvious reason why they would buy. Plenty of empirical studies have demonstrated the valuable potential of this method if shareholders know where to look (learn more here).
With all of this in mind, let’s take a glance at the key action surrounding Hess Corp. (NYSE:HES).
How have hedgies been trading Hess Corp. (NYSE:HES)?
Heading into Q2, a total of 59 of the hedge funds we track were bullish in this stock, a change of 55% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings meaningfully.
According to our comprehensive database, Paul Singer’s Elliott Management had the biggest position in Hess Corp. (NYSE:HES), worth close to $1.0741 billion, comprising 22.5% of its total 13F portfolio. Sitting at the No. 2 spot is Ralph V. Whitworth of Relational Investors, with a $655.7 million position; 12.6% of its 13F portfolio is allocated to the stock. Remaining hedgies that are bullish include Brian Jackelow’s SAB Capital Management, John Paulson’s Paulson & Co and Jonathon Jacobson’s Highfields Capital Management.
As aggregate interest increased, key hedge funds were leading the bulls’ herd. SAB Capital Management, managed by Brian Jackelow, assembled the most outsized position in Hess Corp. (NYSE:HES). SAB Capital Management had 291 million invested in the company at the end of the quarter. John Paulson’s Paulson & Co also initiated a $192.9 million position during the quarter. The other funds with brand new HES positions are Jonathon Jacobson’s Highfields Capital Management, Robert Pitts’s Steadfast Capital Management, and James Dinan’s York Capital Management.
Insider trading activity in Hess Corp. (NYSE:HES)
Insider trading activity, especially when it’s bullish, is particularly usable when the company in question has experienced transactions within the past six months. Over the latest 180-day time period, Hess Corp. (NYSE:HES) has experienced 10 unique insiders buying, and 8 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Hess Corp. (NYSE:HES). These stocks are Ultrapar Participacoes SA (ADR) (NYSE:UGP), Imperial Oil Limited (USA) (NYSEAMEX:IMO), Marathon Petroleum Corp (NYSE:MPC), Valero Energy Corporation (NYSE:VLO), and Marathon Oil Corporation (NYSE:MRO). This group of stocks are in the oil & gas refining & marketing industry and their market caps resemble HES’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Ultrapar Participacoes SA (ADR) (NYSE:UGP)||7||0||0|
|Imperial Oil Limited (USA) (NYSEAMEX:IMO)||11||0||0|
|Marathon Petroleum Corp (NYSE:MPC)||49||0||5|
|Valero Energy Corporation (NYSE:VLO)||56||0||10|
|Marathon Oil Corporation (NYSE:MRO)||39||0||2|
With the results exhibited by the aforementioned strategies, everyday investors should always watch hedge fund and insider trading activity, and Hess Corp. (NYSE:HES) shareholders fit into this picture quite nicely.