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Is Halliburton Company (HAL) Going to Burn These Hedge Funds?

Halliburton CompanyIs Halliburton Company (NYSE:HAL) the right pick for your portfolio? Hedge funds are getting more optimistic. The number of bullish hedge fund bets inched up by 11 in recent months.

To most shareholders, hedge funds are seen as worthless, outdated investment vehicles of years past. While there are greater than 8000 funds with their doors open at present, we at Insider Monkey choose to focus on the elite of this group, about 450 funds. It is estimated that this group has its hands on the lion’s share of all hedge funds’ total asset base, and by watching their top stock picks, we have figured out a number of investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum 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 23.3 percentage points in 8 months (see the details here).

Equally as beneficial, positive insider trading activity is another way to break down the stock market universe. There are many stimuli for a bullish insider to cut shares of his or her company, but only one, very simple reason why they would behave bullishly. Plenty of academic studies have demonstrated the useful potential of this method if shareholders know where to look (learn more here).

Consequently, we’re going to take a gander at the latest action surrounding Halliburton Company (NYSE:HAL).

What does the smart money think about Halliburton Company (NYSE:HAL)?

At the end of the first quarter, a total of 63 of the hedge funds we track were bullish in this stock, a change of 21% from the first quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings considerably.

According to our comprehensive database, Omega Advisors, managed by Leon Cooperman, holds the most valuable position in Halliburton Company (NYSE:HAL). Omega Advisors has a $162 million position in the stock, comprising 2.5% of its 13F portfolio. Coming in second is Magnetar Capital, managed by Alec Litowitz and Ross Laser, which held a $134 million call position; the fund has 4.3% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Ken Griffin’s Citadel Investment Group, Phill Gross and Robert Atchinson’s Adage Capital Management and Robert Pitts’s Steadfast Capital Management.

As aggregate interest increased, key hedge funds have jumped into Halliburton Company (NYSE:HAL) headfirst. Brave Warrior Capital, managed by Glenn Greenberg, created the largest position in Halliburton Company (NYSE:HAL). Brave Warrior Capital had 61.2 million invested in the company at the end of the quarter. William Harnisch’s Peconic Partners LLC also initiated a $27.1 million position during the quarter. The other funds with brand new HAL positions are Steven Tananbaum’s GoldenTree Asset Management, Mark Kingdon’s Kingdon Capital, and Richard Chilton’s Chilton Investment Company.

What do corporate executives and insiders think about Halliburton Company (NYSE:HAL)?

Insider trading activity, especially when it’s bullish, is particularly usable when the company in focus has experienced transactions within the past 180 days. Over the latest half-year time frame, Halliburton Company (NYSE:HAL) has seen zero unique insiders purchasing, and 9 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Halliburton Company (NYSE:HAL). These stocks are FMC Technologies, Inc. (NYSE:FTI), Schlumberger Limited. (NYSE:SLB), Cameron International Corporation (NYSE:CAM), Baker Hughes Incorporated (NYSE:BHI), and National-Oilwell Varco, Inc. (NYSE:NOV). This group of stocks are in the oil & gas equipment & services industry and their market caps are similar to HAL’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
FMC Technologies, Inc. (NYSE:FTI) 14 1 7
Schlumberger Limited. (NYSE:SLB) 57 0 8
Cameron International Corporation (NYSE:CAM) 31 0 10
Baker Hughes Incorporated (NYSE:BHI) 31 0 6
National-Oilwell Varco, Inc. (NYSE:NOV) 47 1 1

With the returns exhibited by the aforementioned time-tested strategies, retail investors must always keep an eye on hedge fund and insider trading sentiment, and Halliburton Company (NYSE:HAL) is no exception.

Click here to learn why you should track hedge funds

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