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This Metric Says You Are Smart to Buy Gran Tierra Energy Inc. (GTE)

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What’s a smart Gran Tierra Energy Inc. (NYSEAMEX:GTE) to do?

If you were to ask many traders, hedge funds are assumed to be useless, old investment tools of an era lost to time. Although there are more than 8,000 hedge funds with their doors open currently, this site looks at the elite of this group, about 525 funds. It is widely held that this group oversees most of all hedge funds’ total assets, and by monitoring their highest quality stock picks, we’ve uncovered a number of investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum 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 topped the S&P 500 index by 33 percentage points in 11 months (find the details here).

Just as useful, bullish insider trading activity is a second way to analyze the financial markets. There are many incentives for an insider to cut shares of his or her company, but only one, very clear reason why they would behave bullishly. Many empirical studies have demonstrated the valuable potential of this tactic if “monkeys” understand where to look (learn more here).

Gran Tierra Energy Inc. (NYSEAMEX:GTE)

Now that that’s out of the way, let’s examine the latest info surrounding Gran Tierra Energy Inc. (NYSEAMEX:GTE).

How are hedge funds trading Gran Tierra Energy Inc. (NYSEAMEX:GTE)?

In preparation for the third quarter, a total of 21 of the hedge funds we track held long positions in this stock, a change of 24% from the first quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their stakes meaningfully.

When using filings from the hedgies we track, Amber Capital, managed by Joseph Oughourlian and Michel Brogard, holds the biggest position in Gran Tierra Energy Inc. (NYSEAMEX:GTE). Amber Capital has a $70.4 million position in the stock, comprising 74.4% of its 13F portfolio. Sitting at the No. 2 spot is SAC Capital Advisors, managed by Steven Cohen, which held a $17.8 million position; 0.1% of its 13F portfolio is allocated to the company. Other hedgies that hold long positions include Ranjan Tandon’s Libra Advisors, Glenn Russell Dubin’s Highbridge Capital Management and Andy Redleaf’s Whitebox Advisors.

As aggregate interest spiked, certain bigger names were leading the bulls’ herd. Amber Capital, managed by Joseph Oughourlian and Michel Brogard, created the biggest position in Gran Tierra Energy Inc. (NYSEAMEX:GTE). Amber Capital had 70.4 million invested in the company at the end of the quarter. Steven Cohen’s SAC Capital Advisors also initiated a $17.8 million position during the quarter. The other funds with new positions in the stock are Ranjan Tandon’s Libra Advisors, Glenn Russell Dubin’s Highbridge Capital Management, and Andy Redleaf’s Whitebox Advisors.

How are insiders trading Gran Tierra Energy Inc. (NYSEAMEX:GTE)?

Insider buying made by high-level executives is most useful when the company in question has experienced transactions within the past half-year. Over the last 180-day time period, Gran Tierra Energy Inc. (NYSEAMEX:GTE) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to Gran Tierra Energy Inc. (NYSEAMEX:GTE). These stocks are Crosstex Energy, L.P. (NASDAQ:XTEX), PDC Energy Inc (NASDAQ:PDCE), Bonanza Creek Energy Inc (NYSE:BCEI), EXCO Resources Inc (NYSE:XCO), and Enbridge Energy Management, L.L.C. (NYSE:EEQ). This group of stocks belong to the independent oil & gas industry and their market caps are similar to GTE’s market cap.

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