Chesapeake Energy Corporation (NYSE:CHK) shareholders have witnessed a decrease in hedge fund interest recently.
In the 21st century investor’s toolkit, there are a multitude of gauges investors can use to monitor their holdings. A pair of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top investment managers can outclass the broader indices by a solid margin (see just how much).
Equally as beneficial, bullish insider trading sentiment is another way to break down the financial markets. As the old adage goes: there are plenty of incentives for an executive to cut shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the impressive potential of this strategy if you understand what to do (learn more here).
With these “truths” under our belt, it’s important to take a peek at the latest action regarding Chesapeake Energy Corporation (NYSE:CHK).
Hedge fund activity in Chesapeake Energy Corporation (NYSE:CHK)
Heading into Q2, a total of 35 of the hedge funds we track were long in this stock, a change of -15% from the previous quarter. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes meaningfully.
According to our comprehensive database, Southeastern Asset Management, managed by Mason Hawkins, holds the largest position in Chesapeake Energy Corporation (NYSE:CHK). Southeastern Asset Management has a $1.8252 billion position in the stock, comprising 8.2% of its 13F portfolio. On Southeastern Asset Management’s heels is Icahn Capital LP, managed by Carl Icahn, which held a $1.2185 billion position; 7.2% of its 13F portfolio is allocated to the stock. Remaining hedgies that hold long positions include Bruce Berkowitz’s Fairholme (FAIRX), Israel Englander’s Millennium Management and Mohnish Pabrai’s Mohnish Pabrai.
Due to the fact that Chesapeake Energy Corporation (NYSE:CHK) has experienced falling interest from the aggregate hedge fund industry, it’s easy to see that there exists a select few funds that decided to sell off their entire stakes heading into Q2. Interestingly, Bruce Kovner’s Caxton Associates LP cut the largest investment of the 450+ funds we track, worth an estimated $16.6 million in call options. Ken Griffin’s fund, Citadel Investment Group, also cut its stock, about $10.7 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 6 funds heading into Q2.
How are insiders trading Chesapeake Energy Corporation (NYSE:CHK)?
Insider trading activity, especially when it’s bullish, is most useful when the company we’re looking at has experienced transactions within the past six months. Over the last 180-day time period, Chesapeake Energy Corporation (NYSE:CHK) has seen 5 unique insiders buying, and 4 insider sales (see the details of insider trades here).
With the results demonstrated by our time-tested strategies, everyday investors must always monitor hedge fund and insider trading sentiment, and Chesapeake Energy Corporation (NYSE:CHK) is an important part of this process.