Is WPX Energy Inc (NYSE:WPX) a sound stock to buy now? Prominent investors are becoming less confident. The number of bullish hedge fund bets shrunk by 4 recently.
To the average investor, there are plenty of gauges shareholders can use to monitor Mr. Market. A duo of the most innovative are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite fund managers can outpace their index-focused peers by a solid amount (see just how much).
Just as important, optimistic insider trading activity is another way to break down the stock market universe. Just as you’d expect, there are a number of motivations for a bullish insider to cut shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Several academic studies have demonstrated the impressive potential of this tactic if “monkeys” understand where to look (learn more here).
Keeping this in mind, we’re going to take a peek at the key action encompassing WPX Energy Inc (NYSE:WPX).
Hedge fund activity in WPX Energy Inc (NYSE:WPX)
At year’s end, a total of 24 of the hedge funds we track were bullish in this stock, a change of -14% from one quarter earlier. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were boosting their holdings substantially.
When looking at the hedgies we track, Jeffrey Tannenbaum’s Fir Tree had the most valuable position in WPX Energy Inc (NYSE:WPX), worth close to $122 million, accounting for 3.1% of its total 13F portfolio. Coming in second is Taconic Capital, managed by Frank Brosens, which held a $112 million position; the fund has 6.6% of its 13F portfolio invested in the stock. Some other hedge funds that are bullish include John A. Levin’s Levin Capital Strategies, Leon Cooperman’s Omega Advisors and Murray Stahl’s Horizon Asset Management.
Because WPX Energy Inc (NYSE:WPX) has witnessed declining sentiment from hedge fund managers, it’s easy to see that there exists a select few hedgies that slashed their entire stakes in Q4. Interestingly, Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC dumped the biggest investment of all the hedgies we monitor, valued at an estimated $5 million in stock., and David Harding of Winton Capital Management was right behind this move, as the fund sold off about $2 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 4 funds in Q4.
What have insiders been doing with WPX Energy Inc (NYSE:WPX)?
Bullish insider trading is at its handiest when the company in question has experienced transactions within the past half-year. Over the last six-month time period, WPX Energy Inc (NYSE:WPX) has seen 1 unique insiders buying, and zero insider sales (see the details of insider trades here).
With the returns demonstrated by our strategies, everyday investors must always monitor hedge fund and insider trading sentiment, and WPX Energy Inc (NYSE:WPX) shareholders fit into this picture quite nicely.
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.