In this article we will check out the progression of hedge fund sentiment towards Sundance Energy Inc. (NASDAQ:SNDE) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Sundance Energy Inc. (NASDAQ:SNDE) was in 3 hedge funds’ portfolios at the end of March. SNDE has experienced an increase in support from the world’s most elite money managers in recent months. There were 2 hedge funds in our database with SNDE positions at the end of the previous quarter. Our calculations also showed that SNDE isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most stock holders, hedge funds are assumed to be worthless, old investment tools of the past. While there are greater than 8000 funds with their doors open at present, Our researchers hone in on the masters of this club, around 850 funds. It is estimated that this group of investors handle most of the smart money’s total capital, and by keeping an eye on their inimitable stock picks, Insider Monkey has unsheathed several investment strategies that have historically outperformed Mr. Market. Insider Monkey’s flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Nathaniel August of Mangrove Partners
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s analyze the fresh hedge fund action encompassing Sundance Energy Inc. (NASDAQ:SNDE).
What does smart money think about Sundance Energy Inc. (NASDAQ:SNDE)?
At Q1’s end, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 50% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SNDE over the last 18 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Sundance Energy Inc. (NASDAQ:SNDE) was held by Nokomis Capital, which reported holding $0.5 million worth of stock at the end of September. It was followed by Mangrove Partners with a $0.3 million position. The only other hedge fund that is bullish on the company was Millennium Management.
As industrywide interest jumped, some big names have jumped into Sundance Energy Inc. (NASDAQ:SNDE) headfirst. Millennium Management, managed by Israel Englander, created the most valuable position in Sundance Energy Inc. (NASDAQ:SNDE). Millennium Management had $0.1 million invested in the company at the end of the quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Sundance Energy Inc. (NASDAQ:SNDE) but similarly valued. We will take a look at Emerson Radio Corp (NYSE:MSN), U.S. Global Investors, Inc. (NASDAQ:GROW), Pioneer Power Solutions, Inc. (NASDAQ:PPSI), and ZK International Group Co., Ltd. (NASDAQ:ZKIN). This group of stocks’ market valuations resemble SNDE’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MSN | 1 | 625 | -1 |
| GROW | 3 | 1379 | 0 |
| PPSI | 2 | 58 | 0 |
| ZKIN | 1 | 352 | 0 |
| Average | 1.75 | 604 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 1.75 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $1 million in SNDE’s case. U.S. Global Investors, Inc. (NASDAQ:GROW) is the most popular stock in this table. On the other hand Emerson Radio Corp (NYSE:MSN) is the least popular one with only 1 bullish hedge fund positions. Sundance Energy Inc. (NASDAQ:SNDE) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 7.9% in 2020 through May 22nd but still beat the market by 15.6 percentage points. Hedge funds were also right about betting on SNDE as the stock returned 23.3% in Q2 (through May 22nd) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.