Royal Dutch Shell plc (ADR) (NYSE:RDS.A) is one of the most popular energy stocks in today’s market. The question is: should it be? We’ll discuss two indicators that attempt to answer this question.
At the moment, there are a multitude of indicators shareholders can use to track the equity markets. Two of the most useful are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best investment managers can outpace the market by a very impressive margin (see just how much).
Just as key, optimistic insider trading activity is a second way to analyze the financial markets. There are a variety of stimuli for a corporate insider to get rid of shares of his or her company, but only one, very obvious reason why they would behave bullishly. Various empirical studies have demonstrated the valuable potential of this tactic if you understand where to look (learn more here).
Keeping this in mind, it’s important to study the newest info for Royal Dutch Shell plc (ADR) (NYSE:RDS.A).
How have hedgies been trading Royal Dutch Shell plc (ADR) (NYSE:RDS.A)?
At the end of the second quarter, a total of 34 of the hedge funds we track were long in this stock, a change of 3% from the first quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their stakes considerably.
When using filings from the hedgies we track, Richard S. Pzena’s Pzena Investment Management had the largest position in Royal Dutch Shell plc (ADR) (NYSE:RDS.A), worth close to $390.1 million, accounting for 2.6% of its total 13F portfolio. On Pzena Investment Management’s heels is Russell Hawkins of Hawkins Capital, with a $147.7 million position; the fund has 16.8% of its 13F portfolio invested in the stock. Other hedge funds that are bullish include John A. Levin’s Levin Capital Strategies, D. E. Shaw’s D E Shaw and Alec Litowitz and Ross Laser’s Magnetar Capital.
As one would understandably expect, specific money managers have jumped into Royal Dutch Shell plc (ADR) (NYSE:RDS.A) headfirst. Pzena Investment Management, managed by Richard S. Pzena, initiated the most outsized position in Royal Dutch Shell plc (ADR) (NYSE:RDS.A). Pzena Investment Management had 390.1 million invested in the company at the end of the quarter. Russell Hawkins’s Hawkins Capital also initiated a $147.7 million position during the quarter. The other funds with brand new RDS.A positions are John A. Levin’s Levin Capital Strategies, D. E. Shaw’s D E Shaw, and Alec Litowitz and Ross Laser’s Magnetar Capital.
What do corporate executives and insiders think about Royal Dutch Shell plc (ADR) (NYSE:RDS.A)?
Insider buying made by high-level executives is best served when the primary stock in question has experienced transactions within the past 180 days. Over the last six-month time period, Royal Dutch Shell plc (ADR) (NYSE:RDS.A) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll also examine the relationship between both of these indicators in other stocks similar to Royal Dutch Shell plc (ADR) (NYSE:RDS.A). These stocks are Ecopetrol S.A. (ADR) (NYSE:EC), TOTAL S.A. (ADR) (NYSE:TOT), BP plc (ADR) (NYSE:BP), PetroChina Company Limited (ADR) (NYSE:PTR), and Chevron Corporation (NYSE:CVX). This group of stocks are in the major integrated oil & gas industry and their market caps are closest to RDS.A’s market cap.