Emerald Oil Inc (EOX) All The Rage For At Least One Hedge Fund

William C Martin of Raging Capital has increased his stake in Emerald Oil Inc (NYSEMKT:EOX) according to a recent 13G form filed with the SEC. The long/short equity investor, who manages a public equity portfolio valued at $745.13 million has increased his stake in the $30.64 million Oil & Gas exploration company to 1.0 million shares, up from just under 160,000 shares that it reported previously (factoring in Emerald Oil’s 1:20 reverse stock split in May). The stake now amasses 18% of Emerald Oil Inc’s outstanding shares.

William Martin Raging Capital Management

Emerald Oil Inc (NYSEMKT:EOX) recently terminated its plans to conduct a new public offering of shares. The company hopes that by doing so it will shield current shareholders from over-dilution of their existing stakes. The announcement came on concerns that a further decline in Bakken oil price could result in a decline in production. The company has also turned down an opportunity to finalize the acquisition of Delaware Basin. Instead, Emerald Oil will move to develop its Williston basin based on original plans. Remaining financially stable in the current year is the company’s biggest objective, having already spent $42 million of the $65 million CapEx budget.

Out of 700+ active hedge funds that are tracked by Insider Monkey, the interest in Emerald Oil Inc (NYSEAMEX:EOX) declined over the course of the first quarter, as 11 funds had invested $7.40 million in the company at the end of March as compared to 13 funds with $14.81 million invested at the end of 2014. Jeffrey Bronchick’s Cove Street Capital and Don Morgan’s Brigade Capital are two of the biggest stockholders of Emerald Oil Inc in our database, with holdings of 2.81 million and 1.48 million shares respectively.

Raging Capital was betting on Energy, Technology, and Healthcare stocks heading into this quarter. The top three positions of the fund were Microsemi Communications Inc (NASDAQ:VTSS), Range Resources Corp. (NYSE:RRC), and Ply Gem Holdings Inc (NYSE:PGEM), which we’ll look at briefly now.

Follow William C. Martin's Raging Capital Management

Microsemi Communications Inc (NASDAQ:VTSS) has gained access to high-performance semiconductors, integrated turnkey systems and application software after completing the acquisition of Vitesse Semiconductor. The shareholders of the stock were paid $5.28 a share after the company agreed to the merger. Microsemi Communications Inc (NASDAQ:VTSS), a key player in semiconductor solutions can now indirectly immerse itself in the enterprise business and Internet of Things by leveraging Vitesse products. The merger will result in $20 million of cost savings.

The US Energy Information has raised concerns stating that output from the Marcellus shale may decline for the first time, with low gas prices forcing Range Resources Corp. (NYSE:RRC) to re-think its production strategy. The number of rigs in the area has dropped considerably. The likes of Chesapeake Energy Corporation (NYSE:CHK) and Cabot Oil & Gas Corporation (NYSE:COG) have opted to shut down production as the effects of low gas prices continue to be felt. Range Resources Corp. (NYSE:RRC) also plans to reward its shareholders with a dividend of $0.04.

Ply Gem Holdings Inc (NYSE:PGEM) ended the first quarter on a high as net sales for the quarter increased by 39.6% compared to the same period last year. The company’s CEO, Gary Robinette, expects organic growth and its Simonton Windows acquisition to accelerate the momentum of sales. Improved selling prices continue to drive Ply Gem Holdings Inc (NYSE:PGEM) gross profit margin, which jumped by 60 basis points in the first quarter. Robinette expects the integration of costs for the Windows business to result in improved operating results going forward. Ply Gem’s Eastern Siding business Mitten Inc. also continues to show signs of growth and should generate meaningful EBITDA this year.

Disclosure: None