Is Cenovus Energy Inc (USA) (CVE) Going to Burn These Hedge Funds?

Page 1 of 2

To the average investor, there are many gauges shareholders can use to analyze publicly traded companies. Two 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 elite money managers can outperform the market by a very impressive amount (see just how much).

Just as necessary, bullish insider trading sentiment is a second way to analyze the investments you’re interested in. Obviously, there are lots of reasons for an insider to sell shares of his or her company, but only one, very obvious reason why they would behave bullishly. Several empirical studies have demonstrated the valuable potential of this strategy if piggybackers know where to look (learn more here).

Cenovus Energy Inc (USA) (NYSE:CVE)

What’s more, we’re going to discuss the recent info for Cenovus Energy Inc (USA) (NYSE:CVE).

How are hedge funds trading Cenovus Energy Inc (USA) (NYSE:CVE)?

In preparation for the third quarter, a total of 18 of the hedge funds we track were long in this stock, a change of 0% from the previous quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings meaningfully.

According to our 13F database, Harris Associates, managed by Natixis Global Asset Management, holds the most valuable position in Cenovus Energy Inc (USA) (NYSE:CVE). Harris Associates has a $610.4 million position in the stock, comprising 1.3% of its 13F portfolio. On Harris Associates’s heels is First Eagle Investment Management, managed by Matt McLennan, which held a $548.9 million position; the fund has 1.7% of its 13F portfolio invested in the stock. Some other hedgies that are bullish include Lou Simpson’s SQ Advisors, Jim Simons’s Renaissance Technologies and D. E. Shaw’s D E Shaw.

Judging by the fact that Cenovus Energy Inc (USA) (NYSE:CVE) has witnessed bearish sentiment from upper-tier hedge fund managers, logic holds that there exists a select few hedgies that decided to sell off their full holdings heading into Q2. Interestingly, Richard Chilton’s Chilton Investment Company said goodbye to the biggest investment of all the hedgies we key on, comprising close to $6.7 million in stock. Anand Parekh’s fund, Alyeska Investment Group, also sold off its stock, about $3.4 million worth. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

How are insiders trading Cenovus Energy Inc (USA) (NYSE:CVE)?

Legal insider trading, particularly when it’s bullish, is most useful when the company we’re looking at has experienced transactions within the past six months. Over the latest six-month time frame, Cenovus Energy Inc (USA) (NYSE:CVE) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to Cenovus Energy Inc (USA) (NYSE:CVE). These stocks are Diamond Offshore Drilling Inc (NYSE:DO), Concho Resources Inc. (NYSE:CXO), ENSCO PLC (NYSE:ESV), Transocean LTD (NYSE:RIG), and Seadrill Ltd (NYSE:SDRL). All of these stocks are in the oil & gas drilling & exploration industry and their market caps are similar to CVE’s market cap.

Page 1 of 2