Is Suncor Energy Inc. (USA) (NYSE:SU) a healthy stock for your portfolio? Hedge funds are taking a bearish view. The number of long hedge fund positions were cut by 8 lately.
In the 21st century investor’s toolkit, there are many methods shareholders can use to monitor stocks. A duo of the most innovative are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best investment managers can outpace their index-focused peers by a superb amount (see just how much).
Just as important, optimistic insider trading activity is another way to break down the financial markets. As the old adage goes: there are a variety of motivations for an executive to sell shares of his or her company, but just one, very simple reason why they would initiate a purchase. Various empirical studies have demonstrated the market-beating potential of this strategy if investors understand where to look (learn more here).
Now, it’s important to take a look at the key action surrounding Suncor Energy Inc. (USA) (NYSE:SU).
How are hedge funds trading Suncor Energy Inc. (USA) (NYSE:SU)?
Heading into 2013, a total of 27 of the hedge funds we track held long positions in this stock, a change of -23% from the third quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes meaningfully.
Of the funds we track, Tetrem Capital Management, managed by Daniel Bubis, holds the largest position in Suncor Energy Inc. (USA) (NYSE:SU). Tetrem Capital Management has a $155 million position in the stock, comprising 4.6% of its 13F portfolio. Sitting at the No. 2 spot is Ken Griffin of Citadel Investment Group, with a $136 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Rob Citrone’s Discovery Capital Management, Daniel Bubis’s Tetrem Capital Management and Israel Englander’s Millennium Management.
Because Suncor Energy Inc. (USA) (NYSE:SU) has faced declining sentiment from the aggregate hedge fund industry, it’s safe to say that there exists a select few hedge funds that elected to cut their entire stakes heading into 2013. At the top of the heap, Peter J. Eichler Jr.’s Aletheia Research and Management cut the largest investment of the “upper crust” of funds we key on, comprising close to $44 million in stock., and Dmitry Balyasny of Balyasny Asset Management was right behind this move, as the fund said goodbye to about $19 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 8 funds heading into 2013.
What have insiders been doing with Suncor Energy Inc. (USA) (NYSE:SU)?
Insider purchases made by high-level executives is most useful when the company in focus has seen transactions within the past six months. Over the latest 180-day time period, Suncor Energy Inc. (USA) (NYSE:SU) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
With the returns shown by the aforementioned tactics, retail investors should always watch hedge fund and insider trading sentiment, and Suncor Energy Inc. (USA) (NYSE:SU) shareholders fit into this picture quite nicely.
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