Is PDC Energy Inc (NASDAQ:PDCE) undervalued? Money managers are becoming more confident. The number of long hedge fund bets inched up by 7 in recent months.
In the financial world, there are many indicators market participants can use to watch Mr. Market. Some of the most innovative are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top money managers can outclass the broader indices by a healthy margin (see just how much).
Equally as key, positive insider trading sentiment is another way to parse down the world of equities. As the old adage goes: there are a number of reasons for an upper level exec to sell shares of his or her company, but only one, very simple reason why they would initiate a purchase. Various academic studies have demonstrated the impressive potential of this tactic if “monkeys” understand what to do (learn more here).
With all of this in mind, we’re going to take a look at the recent action surrounding PDC Energy Inc (NASDAQ:PDCE).
Hedge fund activity in PDC Energy Inc (NASDAQ:PDCE)
At Q1′s end, a total of 19 of the hedge funds we track held long positions in this stock, a change of 58% from the previous quarter. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes substantially.
Of the funds we track, Citadel Investment Group, managed by Ken Griffin, holds the biggest position in PDC Energy Inc (NASDAQ:PDCE). Citadel Investment Group has a $74.8 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Point State Capital, managed by Sean Cullinan, which held a $40.8 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Phill Gross and Robert Atchinson’s Adage Capital Management, John Murphy’s Alydar Capital and Alec Litowitz and Ross Laser’s Magnetar Capital.
As one would reasonably expect, key money managers were breaking ground themselves. Alydar Capital, managed by John Murphy, established the biggest position in PDC Energy Inc (NASDAQ:PDCE). Alydar Capital had 34.7 million invested in the company at the end of the quarter. Alec Litowitz and Ross Laser’s Magnetar Capital also made a $19.2 million investment in the stock during the quarter. The following funds were also among the new PDCE investors: Drew Cupps’s Cupps Capital Management, Jim Simons’s Renaissance Technologies, and Steven Cohen’s SAC Capital Advisors.
What have insiders been doing with PDC Energy Inc (NASDAQ:PDCE)?
Bullish insider trading is at its handiest when the primary stock in question has seen transactions within the past 180 days. Over the latest half-year time frame, PDC Energy Inc (NASDAQ:PDCE) has seen zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to PDC Energy Inc (NASDAQ:PDCE). These stocks are Enbridge Energy Management, L.L.C. (NYSE:EEQ), Gran Tierra Energy Inc. (NYSEAMEX:GTE), Crosstex Energy, L.P. (NASDAQ:XTEX), EXCO Resources Inc (NYSE:XCO), and Bonanza Creek Energy Inc (NYSE:BCEI). This group of stocks are the members of the independent oil & gas industry and their market caps resemble PDCE’s market cap.