Hedge Funds Are Crazy About Stone Energy Corporation (SGY)

Stone Energy Corporation (NYSE:SGY) has experienced an increase in support from the world’s most elite money managers lately.

To the average investor, there are a multitude of indicators investors can use to watch publicly traded companies. Two of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite hedge fund managers can outperform their index-focused peers by a significant margin (see just how much).

Stone Energy Corporation (NYSE:SGY)Just as integral, positive insider trading activity is a second way to parse down the financial markets. As the old adage goes: there are many stimuli for an insider to downsize shares of his or her company, but only one, very simple reason why they would initiate a purchase. Various empirical studies have demonstrated the valuable potential of this method if shareholders understand what to do (learn more here).

Consequently, it’s important to take a glance at the recent action regarding Stone Energy Corporation (NYSE:SGY).

What does the smart money think about Stone Energy Corporation (NYSE:SGY)?

At the end of the first quarter, a total of 16 of the hedge funds we track were bullish in this stock, a change of 7% from the first quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their stakes meaningfully.

When looking at the hedgies we track, Millennium Management, managed by Israel Englander, holds the largest position in Stone Energy Corporation (NYSE:SGY). Millennium Management has a $25.2 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Highbridge Capital Management, managed by Glenn Russell Dubin, which held a $18.1 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other hedge funds with similar optimism include Chuck Royce’s Royce & Associates, Ken Griffin’s Citadel Investment Group and Cliff Asness’s AQR Capital Management.

Consequently, specific money managers were leading the bulls’ herd. PAR Capital Management, managed by Paul Reeder and Edward Shapiro, established the most outsized position in Stone Energy Corporation (NYSE:SGY). PAR Capital Management had 5.4 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also initiated a $2.4 million position during the quarter. The following funds were also among the new SGY investors: Matthew Tewksbury’s Stevens Capital Management and Andy Redleaf’s Whitebox Advisors.

How are insiders trading Stone Energy Corporation (NYSE:SGY)?

Bullish insider trading is most useful when the company we’re looking at has experienced transactions within the past six months. Over the last six-month time period, Stone Energy Corporation (NYSE:SGY) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Stone Energy Corporation (NYSE:SGY). These stocks are LinnCo LLC (NASDAQ:LNCO), Diamondback Energy Inc (NASDAQ:FANG), QR Energy LP (NYSE:QRE), Carrizo Oil & Gas, Inc. (NASDAQ:CRZO), and EPL Oil & Gas Inc (NYSE:EPL). This group of stocks are in the independent oil & gas industry and their market caps resemble SGY’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
LinnCo LLC (NASDAQ:LNCO) 10 0 0
Diamondback Energy Inc (NASDAQ:FANG) 7 0 0
QR Energy LP (NYSE:QRE) 5 2 0
Carrizo Oil & Gas, Inc. (NASDAQ:CRZO) 8 0 3
EPL Oil & Gas Inc (NYSE:EPL) 14 0 5

With the returns demonstrated by Insider Monkey’s research, retail investors should always keep an eye on hedge fund and insider trading activity, and Stone Energy Corporation (NYSE:SGY) is no exception.

Click here to learn why you should track hedge funds