Investing in small cap stocks has historically been a way to outperform the market, as small cap companies typically grow faster on average than the blue chips. That outperformance comes with a price, however, as there are occasional periods of higher volatility. The time period between June 25 and the end of October was one of those periods, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points. Given that the funds we track tend to have a disproportionate amount of their portfolios in smaller cap stocks, they have seen some volatility in their portfolios too. Actually their moves are potentially one of the factors that contributed to this volatility. In this article, we use our extensive database of hedge fund holdings to find out what the smart money thinks of Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR).
Is Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) a safe investment now? The best stock pickers are becoming less confident. The number of long hedge fund bets decreased by 7 in recent months. At the end of this article, we will also compare Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) to other stocks, including Becton, Dickinson and Co. (NYSE:BDX), American Electric Power Company, Inc. (NYSE:AEP), and The Chubb Corporation (NYSE:CB) to get a better sense of its popularity.
To the average investor, there are a large number of tools stock market investors have at their disposal to analyze stocks. A pair of the most underrated tools are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the elite fund managers can trounce the S&P 500 by a superb margin (see the details here).
Now, we’re going to take a look at the latest action encompassing Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR).
How have hedgies been trading Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR)?
At the end of September, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a drop of 23% from one quarter earlier. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ken Fisher’s Fisher Asset Management has the biggest position in Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR), worth close to $41.9 million, corresponding to 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Oaktree Capital Management, managed by Howard Marks, which holds a $30.4 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism encompass Hari Hariharan’s NWI Management, Renaissance Technologies, and D E Shaw.