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Should You Avoid Eni SpA (ADR) (E)?

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Eni SpA (ADR) (NYSE:E) has experienced a decrease in support from the world’s most elite money managers lately.

At the moment, there are plenty of gauges shareholders can use to analyze publicly traded companies. Some of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite hedge fund managers can outpace the broader indices by a very impressive margin (see just how much).

David Dreman

Just as important, positive insider trading activity is another way to parse down the financial markets. Just as you’d expect, there are a number of stimuli for an insider to get rid of shares of his or her company, but just one, very clear reason why they would buy. Many academic studies have demonstrated the market-beating potential of this method if piggybackers know where to look (learn more here).

With these “truths” under our belt, let’s take a gander at the recent action encompassing Eni SpA (ADR) (NYSE:E).

How have hedgies been trading Eni SpA (ADR) (NYSE:E)?

At the end of the fourth quarter, a total of 6 of the hedge funds we track held long positions in this stock, a change of -25% from one quarter earlier. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were upping their holdings meaningfully.

When looking at the hedgies we track, David Dreman’s Dreman Value Management had the most valuable position in Eni SpA (ADR) (NYSE:E), worth close to $5.2 million, accounting for 0.1% of its total 13F portfolio. On Dreman Value Management’s heels is Two Sigma Advisors, managed by John Overdeck and David Siegel, which held a $5 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other hedge funds that are bullish include Phill Gross and Robert Atchinson’s Adage Capital Management, Steven Cohen’s SAC Capital Advisors and Ken Griffin’s Citadel Investment Group.

Due to the fact that Eni SpA (ADR) (NYSE:E) has witnessed a declination in interest from the smart money, we can see that there is a sect of funds who sold off their full holdings at the end of the year. Interestingly, Jim Simons’s Renaissance Technologies dumped the biggest position of the “upper crust” of funds we monitor, valued at close to $15.1 million in stock., and Israel Englander of Millennium Management was right behind this move, as the fund dropped about $5 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 2 funds at the end of the year.

What have insiders been doing with Eni SpA (ADR) (NYSE:E)?

Insider trading activity, especially when it’s bullish, is particularly usable when the company in focus has seen transactions within the past six months. Over the latest half-year time frame, Eni SpA (ADR) (NYSE:E) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Eni SpA (ADR) (NYSE:E). These stocks are Ecopetrol S.A. (ADR) (NYSE:EC), Occidental Petroleum Corporation (NYSE:OXY), China Petroleum & Chemical Corp (ADR) (NYSE:SNP), ConocoPhillips (NYSE:COP), and Statoil ASA (ADR) (NYSE:STO). This group of stocks are the members of the major integrated oil & gas industry and their market caps are similar to E’s market cap.

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