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Cenovus Energy Inc (TSE:CVE): Are Hedge Funds Right About This Stock?

Cenovus Energy Inc (TSE:CVE) was in 18 hedge funds’ portfolio at the end of December. CVE investors should be aware of a decrease in hedge fund sentiment lately. There were 18 hedge funds in our database with CVE positions at the end of the previous quarter.

Cenovus Energy Inc (USA) (NYSE:CVE)

To most investors, hedge funds are viewed as underperforming, old investment vehicles of yesteryear. While there are more than 8000 funds in operation today, we at Insider Monkey hone in on the elite of this group, close to 450 funds. Most estimates calculate that this group oversees most of all hedge funds’ total asset base, and by paying attention to their best picks, we have come up with a number of investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 25 percentage points in 6.5 month (see the details here).

Equally as beneficial, bullish insider trading activity is another way to break down the stock market universe. There are a number of incentives for a bullish insider to sell shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the impressive potential of this strategy if investors know what to do (learn more here).

Keeping this in mind, it’s important to take a peek at the latest action surrounding Cenovus Energy Inc (TSE:CVE).

How are hedge funds trading Cenovus Energy Inc (TSE:CVE)?

In preparation for this year, a total of 18 of the hedge funds we track were bullish in this stock, a change of 0% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their stakes considerably.

According to our comprehensive database, Jean-Marie Eveillard’s First Eagle Investment Management had the biggest position in Cenovus Energy Inc (TSE:CVE), worth close to $324 million, comprising 1.2% of its total 13F portfolio. The second largest stake is held by Lou Simpson of SQ Advisors, with a $78 million position; 0.2% of its 13F portfolio is allocated to the stock. Other hedge funds that are bullish include D. E. Shaw’s D E Shaw, Jim Simons’s Renaissance Technologies and Richard Chilton’s Chilton Investment Company.

Since Cenovus Energy Inc (TSE:CVE) has experienced falling interest from the entirety of the hedge funds we track, it’s safe to say that there was a specific group of hedgies that decided to sell off their entire stakes heading into 2013. It’s worth mentioning that Richard Schimel’s Diamondback Capital dumped the biggest stake of the 450+ funds we track, valued at about $22 million in stock.. Mario Gabelli’s fund, GAMCO Investors, also dropped its stock, about $0 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

How have insiders been trading Cenovus Energy Inc (TSE:CVE)?

Insider purchases made by high-level executives is at its handiest when the company we’re looking at has seen transactions within the past 180 days. Over the latest half-year time period, Cenovus Energy Inc (TSE:CVE) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

With the results demonstrated by the aforementioned tactics, everyday investors must always keep an eye on hedge fund and insider trading sentiment, and Cenovus Energy Inc (TSE:CVE) shareholders fit into this picture quite nicely.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

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