Endeavour International Corporation (NYSE:END) has seen a decrease in hedge fund interest recently.
To most shareholders, hedge funds are assumed to be worthless, outdated financial vehicles of the past. While there are more than 8000 funds with their doors open today, we choose to focus on the elite of this club, around 450 funds. Most estimates calculate that this group has its hands on the majority of the hedge fund industry’s total capital, and by monitoring their highest performing picks, we have determined a few investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Just as integral, optimistic insider trading activity is a second way to parse down the financial markets. Just as you’d expect, there are many incentives for a bullish insider to downsize shares of his or her company, but only one, very clear reason why they would initiate a purchase. Plenty of academic studies have demonstrated the impressive potential of this method if shareholders know what to do (learn more here).
Consequently, let’s take a look at the recent action regarding Endeavour International Corporation (NYSE:END).
How are hedge funds trading Endeavour International Corporation (NYSE:END)?
In preparation for this quarter, a total of 8 of the hedge funds we track were long in this stock, a change of 0% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings significantly.
Of the funds we track, Michael Johnston’s Steelhead Partners had the largest position in Endeavour International Corporation (NYSE:END), worth close to $18.7 million, accounting for 1.4% of its total 13F portfolio. Coming in second is Thomas E. Claugus of GMT Capital, with a $10.6 million position; 0.2% of its 13F portfolio is allocated to the stock. Other hedge funds that are bullish include Jim Simons’s Renaissance Technologies, D. E. Shaw’s D E Shaw and Cliff Asness’s AQR Capital Management.
Because Endeavour International Corporation (NYSE:END) has faced bearish sentiment from hedge fund managers, logic holds that there lies a certain “tier” of hedge funds who sold off their full holdings last quarter. Interestingly, Jeffrey Bersh and Michael Wartell’s Venor Capital Management dropped the largest investment of all the hedgies we key on, worth close to $3.2 million in call options, and Jon Bauer of Contrarian Capital was right behind this move, as the fund said goodbye to about $0.9 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
What have insiders been doing with Endeavour International Corporation (NYSE:END)?
Insider buying is at its handiest when the company in question has seen transactions within the past six months. Over the last half-year time frame, Endeavour International Corporation (NYSE:END) has seen 3 unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Endeavour International Corporation (NYSE:END). These stocks are Miller Energy Resources Inc (NYSE:MILL), Crimson Exploration Inc. (NASDAQ:CXPO), Callon Petroleum Company (NYSE:CPE), Equal Energy Ltd. (USA) (NYSE:EQU), and Harvest Natural Resources, Inc. (NYSE:HNR). This group of stocks are the members of the independent oil & gas industry and their market caps are similar to END’s market cap.