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Should You Buy Suncor Energy Inc. (USA) (SU)?

Should energy focused investors take a chance on Suncor Energy Inc. (USA) (NYSE:SU)?

Now, according to many market players, hedge funds are assumed to be overrated, old financial tools of an era lost to time. Although there are over 8,000 hedge funds with their doors open today, this site aim at the leaders of this group, around 525 funds. It is assumed that this group has its hands on the lion’s share of the hedge fund industry’s total capital, and by tracking their highest quality investments, we’ve found a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).

Equally as necessary, optimistic insider trading sentiment is another way to look at the marketplace. There are a number of stimuli for an upper level exec to downsize shares of his or her company, but just one, very simple reason why they would initiate a purchase. Many empirical studies have demonstrated the useful potential of this method if you know what to do (learn more here).

Furthermore, let’s analyze the newest info surrounding Suncor Energy Inc. (USA) (NYSE:SU).

How have hedgies been trading Suncor Energy Inc. (USA) (NYSE:SU)?

Heading into Q3, a total of 33 of the hedge funds we track were long in this stock, a change of 3% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their holdings significantly.

Suncor Energy Inc. (USA) (NYSE:SU)When using filings from the hedgies we track, Berkshire Hathaway, managed by Warren Buffett, holds the largest position in Suncor Energy Inc. (USA) (NYSE:SU). Berkshire Hathaway has a $524 million position in the stock, comprising 0.6% of its 13F portfolio. Sitting at the No. 2 spot is SAC Capital Advisors, managed by Steven Cohen, which held a $163.2 million position; the fund has 0.9% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Ken Griffin’s Citadel Investment Group, Daniel Bubis’s Tetrem Capital Management and Brian Ashford-Russell and Tim Woolley’s Polar Capital.

Consequently, specific money managers were breaking ground themselves. Berkshire Hathaway, managed by Warren Buffett, assembled the biggest position in Suncor Energy Inc. (USA) (NYSE:SU). Berkshire Hathaway had 524 million invested in the company at the end of the quarter. Steven Cohen’s SAC Capital Advisors also made a $163.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Ken Griffin’s Citadel Investment Group, Daniel Bubis’s Tetrem Capital Management, and Brian Ashford-Russell and Tim Woolley’s Polar Capital.

What have insiders been doing with Suncor Energy Inc. (USA) (NYSE:SU)?

Insider buying made by high-level executives is particularly usable when the company in focus has experienced transactions within the past half-year. Over the latest six-month time frame, Suncor Energy Inc. (USA) (NYSE:SU) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also take a look at the relationship between both of these indicators in other stocks similar to Suncor Energy Inc. (USA) (NYSE:SU). These stocks are Apache Corporation (NYSE:APA), EOG Resources Inc (NYSE:EOG), Canadian Natural Resource Ltd (USA) (NYSE:CNQ), Enterprise Products Partners L.P. (NYSE:EPD), and Anadarko Petroleum Corporation (NYSE:APC). All of these stocks are in the independent oil & gas industry and their market caps resemble SU’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Apache Corporation (NYSE:APA) 44 5 1
EOG Resources Inc (NYSE:EOG) 48 0 8
Canadian Natural Resource Ltd (USA) (NYSE:CNQ) 23 0 0
Enterprise Products Partners L.P. (NYSE:EPD) 17 1 3
Anadarko Petroleum Corporation (NYSE:APC) 65 0 2

Using the returns shown by Insider Monkey’s studies, average investors should always watch hedge fund and insider trading activity, and Suncor Energy Inc. (USA) (NYSE:SU) shareholders fit into this picture quite nicely.

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