Synergy Resources Corp (NYSEMKT:SYRG) posted disappointing results for its fiscal third quarter today, reporting a loss of $2.5 million, or $0.20 per basic and diluted share, down from net income of $7.2 million, or $0.09 per basic and diluted share, in the third fiscal quarter of 2014. The loss for the quarter ending May 31 includes a $3 million full cost ceiling impairment charge resulting from lower oil and gas prices, the firm noted. The Street was expecting earnings of $0.01 per share. The oil and gas exploration and production firm says that revenues for the third quarter increased by 1.4% to $26.0 million from $25.7 million in the same quarter last year. The growth comes from a 95% increase in production, primarily from the new horizontal wells brought online, and production from acquisitions and asset swaps with other operators, the firm said. This growth was offset, however, by a 48% decrease in the realized average selling price per barrel of oil equivalent, the energy company added.
The disappointing results for Synergy Resources Corp (NYSEMKT:SYRG)’s fiscal third quarter, stand in stark contrast to the level of enthusiasm displayed by hedge funds for the energy company during the first quarter of the year. At the end of the first quarter, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a surge of 75% from one quarter earlier. This massive increase in hedge fund interest is also mirrored in the burgeoning of their total holdings. The value of those holdings increased by 65.36% to $129.16 million by the end of March 2015, versus $78.11 million at the end of December 2014. This growth is even more amplified by the 5.5% decline in the price of the company’s shares during the first three months of the year. Nonetheless, shares dipped slightly in the second quarter even before the latest news, as the energy sector perhaps hasn’t rebounded to the extent money managers expected.
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We also track insider trades to accurately deduce whether insiders of companies are also going long on their firms’ shares. Synergy Resources insiders did not make any purchases of shares in 2015. There were sales, however, the most recent being Director Robert W. Noffsinger III selling 100,000 shares total in two transactions at the start of last month.
Keeping this in mind, let’s take a look at the recent hedge fund action surrounding Synergy Resources Corp.