Do Hedge Funds and Insiders Love Cenovus Energy Inc (USA) (CVE)?

Cenovus Energy Inc (USA) (NYSE:CVE) was in 18 hedge funds’ portfolio at the end of the first quarter of 2013. CVE has seen a decrease in support from the world’s most elite money managers recently. There were 20 hedge funds in our database with CVE holdings at the end of the previous quarter.

In the 21st century investor’s toolkit, there are tons of indicators market participants can use to analyze the equity markets. A couple of the best are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite hedge fund managers can outpace the broader indices by a solid amount (see just how much).

Just as important, optimistic insider trading activity is another way to parse down the marketplace. There are lots of incentives for an insider to get rid of shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Several empirical studies have demonstrated the impressive potential of this tactic if shareholders understand where to look (learn more here).

Keeping this in mind, it’s important to take a peek at the recent action surrounding Cenovus Energy Inc (USA) (NYSE:CVE).

How have hedgies been trading Cenovus Energy Inc (USA) (NYSE:CVE)?

At Q1’s end, a total of 18 of the hedge funds we track were long in this stock, a change of -10% from the first quarter. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their holdings significantly.

According to our comprehensive database, First Eagle Investment Management, managed by Jean-Marie Eveillard, holds the most valuable position in Cenovus Energy Inc (USA) (NYSE:CVE). First Eagle Investment Management has a $306.2 million position in the stock, comprising 1% of its 13F portfolio. On First Eagle Investment Management’s heels is Lou Simpson of SQ Advisors, with a $85.7 million position; 5.4% of its 13F portfolio is allocated to the company. Remaining hedge funds that are bullish include Jim Simons’s Renaissance Technologies, D. E. Shaw’s D E Shaw and Israel Englander’s Millennium Management.

Since Cenovus Energy Inc (USA) (NYSE:CVE) has experienced a declination in interest from the entirety of the hedge funds we track, it’s easy to see that there were a few funds that elected to cut their positions entirely in Q1. Interestingly, Russell Lucas’s Lucas Capital Management said goodbye to the largest investment of all the hedgies we monitor, totaling about $5.1 million in stock., and Charles Davidson of Wexford Capital was right behind this move, as the fund cut about $2.3 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 2 funds in Q1.

Insider trading activity in Cenovus Energy Inc (USA) (NYSE:CVE)

Insider buying is particularly usable when the primary stock in question has seen transactions within the past 180 days. Over the latest 180-day time frame, Cenovus Energy Inc (USA) (NYSE:CVE) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Cenovus Energy Inc (USA) (NYSE:CVE). These stocks are Diamond Offshore Drilling Inc (NYSE:DO), Concho Resources Inc. (NYSE:CXO), ENSCO PLC (NYSE:ESV), Transocean LTD (NYSE:RIG), and Seadrill Ltd (NYSE:SDRL). This group of stocks are the members of the oil & gas drilling & exploration industry and their market caps are similar to CVE’s market cap.