Now, according to many market players, hedge funds are perceived as delayed, outdated investment vehicles of a period lost to current times. Although there are over 8,000 hedge funds in operation currently, Insider Monkey aim at the moguls of this group, close to 525 funds. It is assumed that this group controls the lion’s share of the smart money’s total capital, and by paying attention to their best stock picks, we’ve figured out a number of investment strategies that have historically beaten the S&P 500. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Equally as useful, positive insider trading activity is another way to analyze the marketplace. There are plenty of incentives for a bullish insider to get rid of shares of his or her company, but just one, very clear reason why they would buy. Various academic studies have demonstrated the useful potential of this strategy if “monkeys” know where to look (learn more here).
Furthermore, we’re going to study the recent info surrounding Unit Corporation (NYSE:UNT).
How have hedgies been trading Unit Corporation (NYSE:UNT)?
At Q2’s end, a total of 10 of the hedge funds we track were bullish in this stock, a change of -17% from the previous quarter. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were upping their stakes significantly.
When using filings from the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Unit Corporation (NYSE:UNT). Royce & Associates has a $304.9 million position in the stock, comprising 0.9% of its 13F portfolio. The second largest stake is held by Dreman Value Management, managed by David Dreman, which held a $23.2 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include Cliff Asness’s AQR Capital Management, D. E. Shaw’s D E Shaw and Ken Griffin’s Citadel Investment Group.
Because Unit Corporation (NYSE:UNT) has faced declining interest from the entirety of the hedge funds we track, we can see that there were a few funds that elected to cut their positions entirely at the end of the second quarter. Interestingly, Mike Vranos’s Ellington sold off the largest investment of the “upper crust” of funds we monitor, comprising about $0.4 million in stock, and Glenn Russell Dubin of Highbridge Capital Management was right behind this move, as the fund sold off about $0.4 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 2 funds at the end of the second quarter.
How have insiders been trading Unit Corporation (NYSE:UNT)?
Bullish insider trading is particularly usable when the primary stock in question has experienced transactions within the past half-year. Over the last six-month time period, Unit Corporation (NYSE:UNT) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll go over the relationship between both of these indicators in other stocks similar to Unit Corporation (NYSE:UNT). These stocks are BreitBurn Energy Partners L.P. (NASDAQ:BBEP), Kodiak Oil & Gas Corp (USA) (NYSE:KOG), Ocean Rig UDW Inc (NASDAQ:ORIG), EV Energy Partners, L.P. (NASDAQ:EVEP), and Pacific Drilling SA (NYSE:PACD). This group of stocks belong to the oil & gas drilling & exploration industry and their market caps match UNT’s market cap.