MDU Resources Group Inc (NYSE:MDU) was in 8 hedge funds’ portfolio at the end of the fourth quarter of 2012. MDU investors should be aware of a decrease in hedge fund interest in recent months. There were 8 hedge funds in our database with MDU positions at the end of the previous quarter.
In the eyes of most stock holders, hedge funds are viewed as unimportant, outdated investment tools of yesteryear. While there are greater than 8000 funds in operation at the moment, we at Insider Monkey hone in on the upper echelon of this club, about 450 funds. Most estimates calculate that this group controls most of all hedge funds’ total asset base, and by tracking their best equity investments, we have discovered a number of investment strategies that have historically outperformed the S&P 500 index. 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 started sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 24 percentage points in 7 months (see the details here).
Just as key, optimistic insider trading activity is a second way to break down the financial markets. There are many reasons for an upper level exec to cut shares of his or her company, but just one, very clear reason why they would behave bullishly. Various academic studies have demonstrated the market-beating potential of this tactic if you know what to do (learn more here).
Keeping this in mind, let’s take a peek at the recent action encompassing MDU Resources Group Inc (NYSE:MDU).
Hedge fund activity in MDU Resources Group Inc (NYSE:MDU)
In preparation for this year, a total of 8 of the hedge funds we track were long in this stock, a change of 0% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their stakes significantly.
Of the funds we track, Citadel Investment Group, managed by Ken Griffin, holds the most valuable position in MDU Resources Group Inc (NYSE:MDU). Citadel Investment Group has a $14.5 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Millennium Management, managed by Israel Englander, which held a $12.4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Cliff Asness’s AQR Capital Management, D. E. Shaw’s D E Shaw and Steven Cohen’s SAC Capital Advisors.
Because MDU Resources Group Inc (NYSE:MDU) has witnessed declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there lies a certain “tier” of money managers who sold off their entire stakes last quarter. It’s worth mentioning that Joseph Vidich’s Manalapan Oracle Capital Management sold off the largest investment of all the hedgies we key on, worth close to $1 million in stock., and Bill Miller of Legg Mason Capital Management was right behind this move, as the fund sold off about $0 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
How have insiders been trading MDU Resources Group Inc (NYSE:MDU)?
Insider purchases made by high-level executives is particularly usable when the company in focus has experienced transactions within the past six months. Over the latest six-month time frame, MDU Resources Group Inc (NYSE:MDU) has seen 1 unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to MDU Resources Group Inc (NYSE:MDU). These stocks are RPC, Inc. (NYSE:RES), Core Laboratories N.V. (NYSE:CLB), Dril-Quip, Inc. (NYSE:DRQ), Superior Energy Services, Inc. (NYSE:SPN), and Oil States International, Inc. (NYSE:OIS). This group of stocks are in the oil & gas equipment & services industry and their market caps are similar to MDU’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|RPC, Inc. (NYSE:RES)||9||0||0|
|Core Laboratories N.V. (NYSE:CLB)||12||0||2|
|Dril-Quip, Inc. (NYSE:DRQ)||8||0||4|
|Superior Energy Services, Inc. (NYSE:SPN)||14||1||2|
|Oil States International, Inc. (NYSE:OIS)||17||1||2|
With the returns demonstrated by Insider Monkey’s research, retail investors must always pay attention to hedge fund and insider trading activity, and MDU Resources Group Inc (NYSE:MDU) shareholders fit into this picture quite nicely.