Enerplus Corp (USA) (ERF): Hedge Funds Are Bullish and Insiders Are Bearish, What Should You Do?

Page 1 of 2

Is Enerplus Corp (USA) (NYSE:ERF) a first-rate investment now? Money managers are turning bullish. The number of bullish hedge fund bets inched up by 3 lately.

In the 21st century investor’s toolkit, there are dozens of gauges shareholders can use to track Mr. Market. A couple of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top investment managers can outclass the S&P 500 by a significant amount (see just how much).

Just as integral, positive insider trading sentiment is another way to break down the world of equities. There are a number of incentives for a corporate insider to downsize shares of his or her company, but just one, very clear reason why they would behave bullishly. Several academic studies have demonstrated the valuable potential of this tactic if shareholders know what to do (learn more here).

Consequently, we’re going to take a glance at the latest action encompassing Enerplus Corp (USA) (NYSE:ERF).

Hedge fund activity in Enerplus Corp (USA) (NYSE:ERF)

At year’s end, a total of 8 of the hedge funds we track held long positions in this stock, a change of 60% from one quarter earlier. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were increasing their holdings substantially.

According to our comprehensive database, Ken Griffin’s Citadel Investment Group had the biggest position in Enerplus Corp (USA) (NYSE:ERF), worth close to $4.1 million, comprising less than 0.1%% of its total 13F portfolio. On Citadel Investment Group’s heels is SAC Subsidiary of Sigma Capital Management, with a $3.2 million position; 0.2% of its 13F portfolio is allocated to the company. Some other hedgies that are bullish include David Costen Haley’s HBK Investments, Thomas E. Claugus’s GMT Capital and Ken Griffin’s Citadel Investment Group.

As industrywide interest jumped, some big names have jumped into Enerplus Corp (USA) (NYSE:ERF) headfirst. Sigma Capital Management, managed by SAC Subsidiary, created the most valuable position in Enerplus Corp (USA) (NYSE:ERF). Sigma Capital Management had 3.2 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $0.4 million investment in the stock during the quarter. The only other fund with a new position in the stock is Steven Cohen’s SAC Capital Advisors.

How have insiders been trading Enerplus Corp (USA) (NYSE:ERF)?

Insider buying is most useful when the primary stock in question has experienced transactions within the past six months. Over the last half-year time frame, Enerplus Corp (USA) (NYSE:ERF) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Enerplus Corp (USA) (NYSE:ERF). These stocks are Patterson-UTI Energy, Inc. (NASDAQ:PTEN), Atwood Oceanics, Inc. (NYSE:ATW), SandRidge Energy Inc. (NYSE:SD), Pengrowth Energy Corp (USA) (NYSE:PGH), and Halcon Resources Corp (NYSE:HK). This group of stocks are the members of the oil & gas drilling & exploration industry and their market caps are closest to ERF’s market cap.

Page 1 of 2