SandRidge Energy Inc. (NYSE:SD) was in 28 hedge funds’ portfolio at the end of March. SD has seen a decrease in support from the world’s most elite money managers recently. There were 31 hedge funds in our database with SD holdings at the end of the previous quarter.
In the 21st century investor’s toolkit, there are a multitude of gauges market participants can use to monitor stocks. Two of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best fund managers can outpace their index-focused peers by a significant margin (see just how much).
Just as integral, bullish insider trading sentiment is another way to break down the marketplace. There are many motivations for an insider to cut shares of his or her company, but only one, very clear reason why they would buy. Many empirical studies have demonstrated the useful potential of this tactic if “monkeys” know what to do (learn more here).
Keeping this in mind, it’s important to take a look at the recent action regarding SandRidge Energy Inc. (NYSE:SD).
What have hedge funds been doing with SandRidge Energy Inc. (NYSE:SD)?
Heading into Q2, a total of 28 of the hedge funds we track were bullish in this stock, a change of -10% from the previous quarter. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were upping their stakes meaningfully.
When looking at the hedgies we track, TPG-AXON Management LP, managed by Dinakar Singh, holds the biggest position in SandRidge Energy Inc. (NYSE:SD). TPG-AXON Management LP has a $190.9 million position in the stock, comprising 9.6% of its 13F portfolio. Coming in second is Fairfax Financial Holdings, managed by Prem Watsa, which held a $170.8 million position; the fund has 6.4% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Leon Cooperman’s Omega Advisors, Mark McGoldrick and Jason Maynard’s Mouth Kellett Capital Management and Jonathon Jacobson’s Highfields Capital Management.
Because SandRidge Energy Inc. (NYSE:SD) has experienced declining sentiment from hedge fund managers, we can see that there was a specific group of hedgies that elected to cut their entire stakes in Q1. It’s worth mentioning that Paul Singer’s Elliott Management dumped the largest position of the 450+ funds we key on, comprising close to $35.4 million in call options, and Don Morgan of Brigade Capital was right behind this move, as the fund cut about $9.5 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 3 funds in Q1.
Insider trading activity in SandRidge Energy Inc. (NYSE:SD)
Insider trading activity, especially when it’s bullish, is particularly usable when the company we’re looking at has experienced transactions within the past six months. Over the last half-year time period, SandRidge Energy Inc. (NYSE:SD) has experienced 2 unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to SandRidge Energy Inc. (NYSE:SD). These stocks are EV Energy Partners, L.P. (NASDAQ:EVEP), Enerplus Corp (USA) (NYSE:ERF), Halcon Resources Corp (NYSE:HK), Kodiak Oil & Gas Corp (USA) (NYSE:KOG), and Pengrowth Energy Corp (USA) (NYSE:PGH). This group of stocks are the members of the oil & gas drilling & exploration industry and their market caps resemble SD’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| EV Energy Partners, L.P. (NASDAQ:EVEP) | 4 | 0 | 0 |
| Enerplus Corp (USA) (NYSE:ERF) | 7 | 0 | 0 |
| Halcon Resources Corp (NYSE:HK) | 16 | 0 | 0 |
| Kodiak Oil & Gas Corp (USA) (NYSE:KOG) | 22 | 0 | 6 |
| Pengrowth Energy Corp (USA) (NYSE:PGH) | 9 | 0 | 0 |
With the results shown by our strategies, everyday investors must always keep an eye on hedge fund and insider trading sentiment, and SandRidge Energy Inc. (NYSE:SD) applies perfectly to this mantra.
