Is Evolution Petroleum Corporation (NYSEAMEX:EPM) ready to raly soon? The best stock pickers are taking an optimistic view. The number of bullish hedge fund positions improved by 1 in recent months.
If you’d ask most market participants, hedge funds are viewed as worthless, outdated investment tools of yesteryear. While there are greater than 8000 funds trading today, we choose to focus on the moguls of this group, around 450 funds. It is estimated that this group oversees most of all hedge funds’ total capital, and by monitoring their top picks, we have discovered a few investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Just as important, bullish insider trading sentiment is a second way to parse down the stock market universe. As the old adage goes: there are lots of incentives for a corporate insider to drop shares of his or her company, but just one, very obvious reason why they would buy. Various academic studies have demonstrated the useful potential of this strategy if shareholders understand what to do (learn more here).
Keeping this in mind, it’s important to take a gander at the key action encompassing Evolution Petroleum Corporation (NYSEAMEX:EPM).
What does the smart money think about Evolution Petroleum Corporation (NYSEAMEX:EPM)?
Heading into 2013, a total of 4 of the hedge funds we track were bullish in this stock, a change of 33% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their stakes considerably.
As industrywide interest jumped, specific money managers have jumped into Evolution Petroleum Corporation (NYSEAMEX:EPM) headfirst. Renaissance Technologies, managed by Jim Simons, initiated the most outsized position in Evolution Petroleum Corporation (NYSEAMEX:EPM). Renaissance Technologies had 0.1 million invested in the company at the end of the quarter.
What do corporate executives and insiders think about Evolution Petroleum Corporation (NYSEAMEX:EPM)?
Insider purchases made by high-level executives is particularly usable when the company in question has seen transactions within the past six months. Over the latest half-year time period, Evolution Petroleum Corporation (NYSEAMEX:EPM) has experienced 2 unique insiders purchasing, and 4 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Evolution Petroleum Corporation (NYSEAMEX:EPM). These stocks are Warren Resources, Inc. (NASDAQ:WRES), Panhandle Oil and Gas Inc. (NYSE:PHX), Whiting USA Trust II (NYSE:WHZ), and Petroquest Energy Inc (NYSE:PQ). All of these stocks are in the independent oil & gas industry and their market caps match EPM’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Warren Resources, Inc. (NASDAQ:WRES) | 8 | 2 | 0 |
| Panhandle Oil and Gas Inc. (NYSE:PHX) | 5 | 2 | 1 |
| Whiting USA Trust II (NYSE:WHZ) | 1 | 0 | 0 |
| Petroquest Energy Inc (NYSE:PQ) | 8 | 0 | 2 |
With the results exhibited by our research, everyday investors should always monitor hedge fund and insider trading activity, and Evolution Petroleum Corporation (NYSEAMEX:EPM) is no exception.
