Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Petroquest Energy Inc (PQ): Hedge Funds and Insiders Are Bearish, What Should You Do?: Warren Resources, Inc. (WRES), Panhandle Oil and Gas Inc. (PHX)

Petroquest Energy Inc (NYSE:PQ) was in 8 hedge funds’ portfolio at the end of the fourth quarter of 2012. PQ has experienced a decrease in hedge fund sentiment of late. There were 9 hedge funds in our database with PQ positions at the end of the previous quarter.

Millennium Management, Catapult Capital Management

To the average investor, there are plenty of indicators shareholders can use to watch their holdings. Two of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite fund managers can trounce the market by a significant amount (see just how much).

Equally as beneficial, bullish insider trading activity is a second way to break down the world of equities. As the old adage goes: there are lots of motivations for an upper level exec to sell shares of his or her company, but just one, very simple reason why they would behave bullishly. Plenty of empirical studies have demonstrated the useful potential of this method if shareholders understand what to do (learn more here).

Keeping this in mind, let’s take a look at the recent action regarding Petroquest Energy Inc (NYSE:PQ).

How are hedge funds trading Petroquest Energy Inc (NYSE:PQ)?

Heading into 2013, a total of 8 of the hedge funds we track were long in this stock, a change of -11% from the third quarter. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes meaningfully.

Of the funds we track, John H. Scully’s SPO Advisory Corp had the most valuable position in Petroquest Energy Inc (NYSE:PQ), worth close to $39 million, accounting for 0.6% of its total 13F portfolio. On SPO Advisory Corp’s heels is Millennium Management, managed by Israel Englander, which held a $1 million position; 0% of its 13F portfolio is allocated to the company. Some other hedgies that are bullish include Cliff Asness’s AQR Capital Management, Ken Griffin’s Citadel Investment Group and David Cohen and Harold Levy’s Iridian Asset Management.

Due to the fact that Petroquest Energy Inc (NYSE:PQ) has faced falling interest from the smart money, logic holds that there is a sect of fund managers who were dropping their entire stakes heading into 2013. It’s worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital sold off the largest investment of the “upper crust” of funds we watch, comprising close to less than $1 million, and Steven Cohen of SAC Capital Advisors was right behind this move, as the fund sold off about less than $1 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds heading into 2013.

What have insiders been doing with Petroquest Energy Inc (NYSE:PQ)?

Bullish insider trading is most useful when the company in question has experienced transactions within the past six months. Over the last half-year time period, Petroquest Energy Inc (NYSE:PQ) has experienced zero unique insiders purchasing, and 1 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 Petroquest Energy Inc (NYSE:PQ). These stocks are Warren Resources, Inc. (NASDAQ:WRES), Panhandle Oil and Gas Inc. (NYSE:PHX), Whiting USA Trust II (NYSE:WHZ), Isramco, Inc. (NASDAQ:ISRL), and Evolution Petroleum Corporation (NYSEAMEX:EPM). All of these stocks are in the independent oil & gas industry and their market caps match PQ’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Warren Resources, Inc. (NASDAQ:WRES) 8 2 0
Panhandle Oil and Gas Inc. (NYSE:PHX) 5 2 1
Whiting USA Trust II (NYSE:WHZ) 1 0 0
Isramco, Inc. (NASDAQ:ISRL) 0 0 0
Evolution Petroleum Corporation (NYSEAMEX:EPM) 4 2 4

With the returns shown by Insider Monkey’s research, retail investors must always monitor hedge fund and insider trading activity, and Petroquest Energy Inc (NYSE:PQ) is an important part of this process.

Click here to learn why you should track hedge funds

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.