This Metric Says You Are Smart to Buy Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR)

Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) was in 30 hedge funds’ portfolio at the end of December. PBR shareholders have witnessed an increase in enthusiasm from smart money in recent months. There were 26 hedge funds in our database with PBR holdings at the end of the previous quarter.

Petroleo Brasileiro Petrobras SA (NYSE:PBR)

In today’s marketplace, there are dozens of methods market participants can use to analyze stocks. A pair of the most innovative are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best fund managers can trounce the broader indices by a solid margin (see just how much).

Equally as integral, positive insider trading sentiment is another way to parse down the world of equities. As the old adage goes: there are plenty of reasons for an executive to cut shares of his or her company, but just one, very obvious reason why they would buy. Many academic studies have demonstrated the impressive potential of this method if investors understand where to look (learn more here).

With all of this in mind, it’s important to take a look at the latest action regarding Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR).

What does the smart money think about Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR)?

At the end of the fourth quarter, a total of 30 of the hedge funds we track were long in this stock, a change of 15% from one quarter earlier. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their holdings considerably.

According to our comprehensive database, Fisher Asset Management, managed by Ken Fisher, holds the largest position in Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR). Fisher Asset Management has a $247 million position in the stock, comprising 0.7% of its 13F portfolio. Coming in second is SAC Capital Advisors, managed by Steven Cohen, which held a $128 million position; 0.3% of its 13F portfolio is allocated to the company. Some other hedge funds with similar optimism include D. E. Shaw’s D E Shaw, Daniel S. Och’s OZ Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Now, specific money managers were breaking ground themselves. OZ Management, managed by Daniel S. Och, created the largest position in Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR). OZ Management had 75 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also made a $40 million investment in the stock during the quarter. The following funds were also among the new PBR investors: Andy Redleaf’s Whitebox Advisors, George Soros’s Soros Fund Management, and SAC Subsidiary’s Sigma Capital Management.

What do corporate executives and insiders think about Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR)?

Insider buying is most useful when the company in question has experienced transactions within the past half-year. Over the latest six-month time frame, Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

With the results shown by Insider Monkey’s time-tested strategies, everyday investors should always monitor hedge fund and insider trading activity, and Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) shareholders fit into this picture quite nicely.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

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.