Is Bonanza Creek Energy Inc (NYSE:BCEI) the right pick for your portfolio? Hedge funds are in a bearish mood. The number of bullish hedge fund positions went down by 2 recently.
In today’s marketplace, there are tons of gauges shareholders can use to monitor stocks. Two of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite hedge fund managers can outperform their index-focused peers by a healthy amount (see just how much).
Just as important, positive insider trading sentiment is a second way to break down the financial markets. As the old adage goes: there are many incentives for an upper level exec to downsize shares of his or her company, but just one, very obvious reason why they would behave bullishly. Plenty of academic studies have demonstrated the valuable potential of this method if shareholders know what to do (learn more here).
With these “truths” under our belt, we’re going to take a look at the recent action encompassing Bonanza Creek Energy Inc (NYSE:BCEI).
What have hedge funds been doing with Bonanza Creek Energy Inc (NYSE:BCEI)?
In preparation for this year, a total of 7 of the hedge funds we track were long in this stock, a change of -22% from the previous quarter. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes significantly.
When looking at the hedgies we track, Citadel Investment Group, managed by Ken Griffin, holds the most valuable position in Bonanza Creek Energy Inc (NYSE:BCEI). Citadel Investment Group has a $18.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Citadel Investment Group’s heels is Cardinal Capital, managed by Amy Minella, which held a $14.2 million position; 1% of its 13F portfolio is allocated to the stock. Some other hedgies that are bullish include Richard Driehaus’s Driehaus Capital, Gregory Fraser, Rudolph Kluiber, and Timothy Kroch’s GRT Capital Partners and Steven Cohen’s SAC Capital Advisors.
Because Bonanza Creek Energy Inc (NYSE:BCEI) has witnessed declining sentiment from hedge fund managers, logic holds that there exists a select few hedgies that decided to sell off their entire stakes at the end of the year. At the top of the heap, D. E. Shaw’s D E Shaw dropped the biggest stake of the “upper crust” of funds we watch, comprising an estimated $41.7 million in stock., and Malcolm Fairbairn of Ascend Capital was right behind this move, as the fund cut about $4.7 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 2 funds at the end of the year.
Insider trading activity in Bonanza Creek Energy Inc (NYSE:BCEI)
Insider purchases made by high-level executives is best served when the company we’re looking at has seen transactions within the past half-year. Over the latest half-year time period, Bonanza Creek Energy Inc (NYSE:BCEI) has seen zero unique insiders buying, and 2 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Bonanza Creek Energy Inc (NYSE:BCEI). These stocks are Crosstex Energy, L.P. (NASDAQ:XTEX), PDC Energy Inc (NASDAQ:PDCE), Enbridge Energy Management, L.L.C. (NYSE:EEQ), Gran Tierra Energy Inc. (NYSEAMEX:GTE), and EXCO Resources Inc (NYSE:XCO). This group of stocks are in the independent oil & gas industry and their market caps are closest to BCEI’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Crosstex Energy, L.P. (NASDAQ:XTEX) | 3 | 0 | 2 |
| PDC Energy Inc (NASDAQ:PDCE) | 11 | 0 | 5 |
| Enbridge Energy Management, L.L.C. (NYSE:EEQ) | 4 | 3 | 0 |
| Gran Tierra Energy Inc. (NYSEAMEX:GTE) | 16 | 0 | 1 |
| EXCO Resources Inc (NYSE:XCO) | 19 | 0 | 0 |
With the returns demonstrated by Insider Monkey’s tactics, everyday investors must always pay attention to hedge fund and insider trading sentiment, and Bonanza Creek Energy Inc (NYSE:BCEI) applies perfectly to this mantra.
