Is SandRidge Energy Inc. (NYSE:SD) a buy, sell, or hold? Hedge funds are becoming less confident. The number of bullish hedge fund positions shrunk by 3 recently.
In the financial world, there are a multitude of gauges investors can use to analyze the equity markets. A duo of the most useful are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top investment managers can outclass the broader indices by a significant amount (see just how much).
Just as key, bullish insider trading sentiment is a second way to parse down the world of equities. As the old adage goes: there are a variety of reasons for an insider to cut shares of his or her company, but just one, very obvious reason why they would behave bullishly. Plenty of empirical studies have demonstrated the useful potential of this tactic if piggybackers know where to look (learn more here).
With all of this in mind, let’s take a glance at the recent action surrounding SandRidge Energy Inc. (NYSE:SD).
What does the smart money think about SandRidge Energy Inc. (NYSE:SD)?
In preparation for this quarter, a total of 28 of the hedge funds we track held long positions in this stock, a change of -10% from one quarter earlier. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their holdings substantially.
According to our comprehensive database, Dinakar Singh’s TPG-AXON Management LP had the biggest position in SandRidge Energy Inc. (NYSE:SD), worth close to $190.9 million, comprising 9.6% of its total 13F portfolio. Coming in second is Prem Watsa of Fairfax Financial Holdings, with a $170.8 million position; 6.4% of its 13F portfolio is allocated to the company. Other hedgies with similar optimism include Leon Cooperman’s Omega Advisors, Mark McGoldrick and Jason Maynard’s Mouth Kellett Capital Management and Jonathon Jacobson’s Highfields Capital Management.
Because SandRidge Energy Inc. (NYSE:SD) has faced bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there is a sect of funds that slashed their entire stakes in Q1. At the top of the heap, Paul Singer’s Elliott Management dropped the biggest stake of all the hedgies we monitor, comprising close to $35.4 million in call options, and Don Morgan of Brigade Capital was right behind this move, as the fund dropped about $9.5 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 3 funds in Q1.
Insider trading activity in SandRidge Energy Inc. (NYSE:SD)
Insider trading activity, especially when it’s bullish, is most useful when the primary stock in question has experienced transactions within the past 180 days. Over the last 180-day time frame, SandRidge Energy Inc. (NYSE:SD) has experienced 1 unique insiders buying, and 5 insider sales (see the details of insider trades here).
With the results exhibited by the aforementioned research, everyday investors should always keep an eye on hedge fund and insider trading sentiment, and SandRidge Energy Inc. (NYSE:SD) is no exception.