Is Enerplus Corp (USA) (ERF) Going to Burn These Hedge Funds?

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Enerplus Corp (USA) (NYSE:ERF) was in 7 hedge funds’ portfolio at the end of March. ERF shareholders have witnessed a decrease in hedge fund interest of late. There were 9 hedge funds in our database with ERF holdings at the end of the previous quarter.

In the 21st century investor’s toolkit, there are many methods investors can use to track stocks. A couple of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best investment managers can outpace the S&P 500 by a healthy margin (see just how much).

Equally as beneficial, positive insider trading activity is another way to parse down the financial markets. Obviously, there are lots of reasons for an executive to downsize shares of his or her company, but only one, very clear reason why they would behave bullishly. Plenty of empirical studies have demonstrated the market-beating potential of this tactic if investors understand where to look (learn more here).

Keeping this in mind, we’re going to take a peek at the recent action surrounding Enerplus Corp (USA) (NYSE:ERF).

What does the smart money think about Enerplus Corp (USA) (NYSE:ERF)?

In preparation for this quarter, a total of 7 of the hedge funds we track were long in this stock, a change of -22% from the previous quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes considerably.

According to our comprehensive database, Matthew Hulsizer’s PEAK6 Capital Management had the largest call position in Enerplus Corp (USA) (NYSE:ERF), worth close to $2.6 million, comprising less than 0.1%% of its total 13F portfolio. Coming in second is Citadel Investment Group, managed by Ken Griffin, which held a $1.4 million call position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining hedgies that are bullish include Jim Simons’s Renaissance Technologies, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Neil Chriss’s Hutchin Hill Capital.

Judging by the fact that Enerplus Corp (USA) (NYSE:ERF) has experienced declining sentiment from the aggregate hedge fund industry, logic holds that there were a few fund managers that slashed their positions entirely at the end of the first quarter. Intriguingly, SAC Subsidiary’s Sigma Capital Management cut the largest position of all the hedgies we monitor, comprising about $3.2 million in stock., and David Costen Haley of HBK Investments was right behind this move, as the fund dropped about $2.1 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 2 funds at the end of the first quarter.

What do corporate executives and insiders think about Enerplus Corp (USA) (NYSE:ERF)?

Bullish insider trading is best served when the company in focus has experienced transactions within the past half-year. Over the last half-year time frame, Enerplus Corp (USA) (NYSE:ERF) has seen zero unique insiders purchasing, and zero 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 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). All of these stocks are in the oil & gas drilling & exploration industry and their market caps resemble ERF’s market cap.

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