Is Oil States International, Inc. (NYSE:OIS) the right investment to pursue these days? The smart money is becoming less confident. The number of bullish hedge fund positions stayed the same which is a slightly negative development in our experience
In the eyes of most stock holders, hedge funds are viewed as slow, outdated financial vehicles of yesteryear. While there are more than 8000 funds in operation at present, we at Insider Monkey hone in on the elite of this club, about 450 funds. It is widely believed that this group has its hands on the lion’s share of the hedge fund industry’s total capital, and by tracking their top equity investments, we have deciphered a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a 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 outclassed the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Just as important, positive insider trading activity is a second way to parse down the stock market universe. Just as you’d expect, there are many incentives for an executive to drop shares of his or her company, but only one, very clear reason why they would buy. Various academic studies have demonstrated the impressive potential of this tactic if shareholders know where to look (learn more here).
Consequently, it’s important to take a peek at the key action encompassing Oil States International, Inc. (NYSE:OIS).
Hedge fund activity in Oil States International, Inc. (NYSE:OIS)
In preparation for this year, a total of 17 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their holdings considerably.
Of the funds we track, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Oil States International, Inc. (NYSE:OIS). Royce & Associates has a $216.2 million position in the stock, comprising 0.7% of its 13F portfolio. On Royce & Associates’s heels is Jacob Doft of Highline Capital Management, with a $96.6 million position; the fund has 4.6% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Alexander Roepers’s Atlantic Investment Management, Jim Simons’s Renaissance Technologies and D. E. Shaw’s D E Shaw.
Since Oil States International, Inc. (NYSE:OIS) has experienced declining sentiment from the aggregate hedge fund industry, it’s easy to see that there was a specific group of hedgies that slashed their positions entirely last quarter. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital sold off the biggest investment of the 450+ funds we monitor, valued at an estimated $6 million in stock.. SAC Subsidiary’s fund, Sigma Capital Management, also sold off its stock, about $1.6 million worth. These transactions are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
How are insiders trading Oil States International, Inc. (NYSE:OIS)?
Insider purchases made by high-level executives is most useful when the company in focus has seen transactions within the past 180 days. Over the latest 180-day time period, Oil States International, Inc. (NYSE:OIS) has seen 1 unique insiders purchasing, and 2 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 Oil States International, Inc. (NYSE:OIS). These stocks are Core Laboratories N.V. (NYSE:CLB), RPC, Inc. (NYSE:RES), Dril-Quip, Inc. (NYSE:DRQ), Superior Energy Services, Inc. (NYSE:SPN), and MDU Resources Group Inc (NYSE:MDU). This group of stocks are in the oil & gas equipment & services industry and their market caps match OIS’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Core Laboratories N.V. (NYSE:CLB)||12||0||2|
|RPC, Inc. (NYSE:RES)||9||0||0|
|Dril-Quip, Inc. (NYSE:DRQ)||8||0||4|
|Superior Energy Services, Inc. (NYSE:SPN)||14||1||2|
|MDU Resources Group Inc (NYSE:MDU)||8||1||1|
With the results exhibited by Insider Monkey’s strategies, retail investors should always keep an eye on hedge fund and insider trading sentiment, and Oil States International, Inc. (NYSE:OIS) shareholders fit into this picture quite nicely.