Huge Year Continues For Callon Petroleum Company (CPE) And Investors Are Taking Note

Callon Petroleum Company (NYSE:CPE) is up by nearly 7% this morning, pushing its year-to-date gains to over 82% as it continues to be one of the lone bright spots in the oil and gas exploration industry this year. The latest gains for the stock come courtesy of Turkey, which shot down a Russian jet along its border with Syria today after the fighter plane reportedly ignored warnings to leave Turkish airspace. The action drew the ire of Russian President Vladimir Putin, who deemed it a “stab in the back”. It also sent gas prices up, which has many energy stocks enjoying strong days today. In Callon Petroleum’s case, the stock has been growing in popularity among top investors of late, who are impressed by its sterling execution.

Callon Petroleum Company (NYSE:CPE) shareholders have witnessed an increase in enthusiasm from smart money of late. Callon Petroleum Company (NYSE:CPE) was in 15 hedge funds’ portfolios at the end of September. There were 10 hedge funds in our database with Callon Petroleum Company (NYSE:CPE) positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as E Commerce China Dangdang Inc (ADR) (NYSE:DANG), EPIQ Systems, Inc. (NASDAQ:EPIQ), and Boot Barn Holdings Inc (NYSE:BOOT) to gather more data points.

In the 21st century investor’s toolkit there are dozens of formulas shareholders put to use to analyze publicly traded companies. A pair of the most under-the-radar formulas are hedge fund and insider trading activity. our researchers have shown that, historically, those who follow the best picks of the elite hedge fund managers can trounce the market by a healthy amount (see the details here).

Now, let’s take a glance at the recent action surrounding Callon Petroleum Company (NYSE:CPE).

How are hedge funds trading Callon Petroleum Company (NYSE:CPE)?

At Q3’s end, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 50% rise from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners has the most valuable position in Callon Petroleum Company (NYSE:CPE), worth close to $12.7 million, amounting to 3.4% of its total 13F portfolio. Coming in second is John Labanowski’s Brenham Capital Management, with an $8.7 million position; 1.9% of its 13F portfolio is allocated to the stock. Other members of the smart money that are bullish encompass J. Carlo Cannell’s Cannell Capital, Richard Driehaus’ Driehaus Capital, and D E Shaw.

As aggregate interest increased, key money managers have been driving this bullishness. AlphaOne Capital Partners, managed by Paul Hondros, assembled the biggest position in Callon Petroleum Company (NYSE:CPE). AlphaOne Capital Partners had $1.8 million invested in the company at the end of the quarter. Sander Gerber’s Hudson Bay Capital Management also initiated a $1.6 million position during the quarter. The following funds were also among the new Callon Petroleum Company (NYSE:CPE) investors: Israel Englander’s Millennium Management, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Matthew Hulsizer’s PEAK6 Capital Management.

Let’s now review hedge fund activity in other stocks similar to Callon Petroleum Company (NYSE:CPE). We will take a look at E Commerce China Dangdang Inc (ADR) (NYSE:DANG), EPIQ Systems, Inc. (NASDAQ:EPIQ), Boot Barn Holdings Inc (NYSE:BOOT), and Hanger Inc (NYSE:HGR). All of these stocks’ market caps are similar to Callon Petroleum Company (NYSE:CPE)’s market cap.

As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $41 million. That figure was $36 million in Callon Petroleum Company (NYSE:CPE)’s case. EPIQ Systems, Inc. (NASDAQ:EPIQ) is the most popular stock in this table. On the other hand Boot Barn Holdings Inc (NYSE:BOOT) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Callon Petroleum Company (NYSE:CPE) is more popular among hedge funds and sentiment is rising fast. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.