Should You Avoid Cenovus Energy Inc (USA) (CVE)?

Since Cenovus Energy Inc (USA) (NYSE:CVE) has weathered declining sentiment from the smart money, it’s safe to say that there is a sect of hedge funds that elected to cut their full holdings during the third quarter. Interestingly, First Eagle Investment Management sold off the biggest investment of all the hedgies followed by Insider Monkey, comprising an estimated $350.4 million in stock, and Anand Parekh’s Alyeska Investment Group was right behind this move, as the fund sold off about $47.8 million worth of shares.

Let’s also examine hedge fund activity in other stocks similar to Cenovus Energy Inc (USA) (NYSE:CVE). These stocks are Oneok Partners LP (NYSE:OKS), ArcelorMittal (ADR) (NYSE:MT), MPLX LP (NYSE:MPLX), and KLA-Tencor Corporation (NASDAQ:KLAC). This group of stocks’ market valuations are closest to CVE’s market valuation.

As you can see these stocks had an average of 22 investors with bullish positions and the average amount invested in these stocks was $372 million, compared to $365 million in CVE’s case. KLA-Tencor Corporation (NASDAQ:KLAC) is the most popular stock in this table. On the other hand Oneok Partners LP (NYSE:OKS) is the least popular one with only nine bullish hedge fund positions. Cenovus Energy Inc (USA) (NYSE:CVE) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard KLA-Tencor Corporation (NASDAQ:KLAC) might be a better candidate to consider taking a long position in.