SandRidge Energy Inc. (NYSE:SD) is a very popular energy stock, both among everyday investors and money managers.
In the 21st century investor’s toolkit, there are tons of methods shareholders can use to track Mr. Market. Two of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top investment managers can trounce the S&P 500 by a very impressive amount (see just how much).
Just as necessary, optimistic insider trading sentiment is another way to look at the marketplace. Obviously, there are a variety of reasons for an insider to downsize shares of his or her company, but only one, very clear reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the useful potential of this strategy if piggybackers know what to do (learn more here).
Now that that’s out of the way, we’re going to discuss the recent info about SandRidge Energy Inc. (NYSE:SD).
What have hedge funds been doing with SandRidge Energy Inc. (NYSE:SD)?
In preparation for the third quarter, a total of 19 of the hedge funds we track were bullish in this stock, a change of -32% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings considerably.
Out of the hedge funds we follow, TPG-AXON Management LP, managed by Dinakar Singh, holds the most valuable position in SandRidge Energy Inc. (NYSE:SD). TPG-AXON Management LP has a $172.4 million position in the stock, comprising 12.1% of its 13F portfolio. Sitting at the No. 2 spot is Fairfax Financial Holdings, managed by Prem Watsa, which held a $154.2 million position; the fund has 6.2% of its 13F portfolio invested in the stock. Some other peers 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.
Judging by the fact that SandRidge Energy Inc. (NYSE:SD) has witnessed bearish sentiment from the entirety of the hedge funds we track, we can see that there exists a select few money managers who were dropping their full holdings in Q1. At the top of the heap, SAC Subsidiary’s Sigma Capital Management dumped the largest position of the 450+ funds we monitor, valued at about $3.2 million in call options.. Bart Baum’s fund, Ionic Capital Management, also cut its call options., about $2.3 million worth. These transactions are interesting, as total hedge fund interest fell by 9 funds in Q1.
Insider trading activity in SandRidge Energy Inc. (NYSE:SD)
Legal insider trading, particularly when it’s bullish, is best served when the primary stock in question has seen transactions within the past half-year. Over the latest six-month time period, SandRidge Energy Inc. (NYSE:SD) has experienced 1 unique insiders buying, and 5 insider sales (see the details of insider trades here).
We’ll go over the relationship between both of these indicators 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) | 6 | 0 | 0 |
| Enerplus Corp (USA) (NYSE:ERF) | 8 | 0 | 0 |
| Halcon Resources Corp (NYSE:HK) | 13 | 13 | 0 |
| Kodiak Oil & Gas Corp (USA) (NYSE:KOG) | 19 | 0 | 1 |
| Pengrowth Energy Corp (USA) (NYSE:PGH) | 8 | 0 | 0 |
Using the results shown by the previously mentioned research, average investors should always keep one eye on hedge fund and insider trading sentiment, and SandRidge Energy Inc. (NYSE:SD) shareholders fit into this picture quite nicely.
