Petroleo Brasileiro Petrobras SA (ADR) (PBR): Are Hedge Funds Right About This Stock?

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Since Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) has experienced a falling interest from the aggregate hedge fund industry, logic holds that there is a sect of fund managers who sold off their entire stakes in the third quarter. Intriguingly, Doug Silverman and Alexander Klabin’s Senator Investment Group said goodbye to the largest stake of all the hedgies monitored by Insider Monkey, valued at about $181 million in stock. David Halpert’s fund, Prince Street Capital Management, also dumped its stock, about $151.5 million worth of shares. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 7 funds in the third quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) but similarly valued. We will take a look at Becton, Dickinson and Co. (NYSE:BDX), American Electric Power Company, Inc. (NYSE:AEP), The Chubb Corporation (NYSE:CB), and Monster Beverage Corp (NASDAQ:MNST). All of these stocks’ market caps match Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR)’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BDX 36 1158913 1
AEP 29 785217 0
CB 48 1431617 23
MNST 27 772542 0

As you can see, these stocks had an average of 35 hedge funds with bullish positions and the average amount invested in these stocks was $1.04 billion. That figure was $199 million in Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR)’s case. The Chubb Corporation (NYSE:CB) is the most popular stock in this table. On the other hand, Monster Beverage Corp (NASDAQ:MNST) is the least popular one with only 27 bullish hedge fund positions. Compared to these stocks, Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) is even less popular than Monster Beverage Corp (NASDAQ:MNST). Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case, more research is warranted.

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