SandRidge Energy Inc. (SD): Are Hedge Funds Right About This Stock?

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Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is SandRidge Energy Inc. (NYSE:SD), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

SandRidge Energy Inc. (NYSE:SD) investors should be aware of an increase in support from the world’s most elite money managers recently. SandRidge Energy Inc. (NYSE:SD) was in 18 hedge funds’ portfolios at the end of March. The all time high for this statistic is 23. Our calculations also showed that SD isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

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John Paulson of Paulson & Co

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Do Hedge Funds Think SD Is A Good Stock To Buy Now?

At Q1’s end, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 38% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards SD over the last 23 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is SD A Good Stock To Buy?

More specifically, Icahn Capital LP was the largest shareholder of SandRidge Energy Inc. (NYSE:SD), with a stake worth $18.8 million reported as of the end of March. Trailing Icahn Capital LP was Cannell Capital, which amassed a stake valued at $11.2 million. Paulson & Co, Renaissance Technologies, and Two Sigma Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Cannell Capital allocated the biggest weight to SandRidge Energy Inc. (NYSE:SD), around 2.51% of its 13F portfolio. Nokomis Capital is also relatively very bullish on the stock, designating 0.36 percent of its 13F equity portfolio to SD.

With a general bullishness amongst the heavyweights, specific money managers were breaking ground themselves. Nokomis Capital, managed by Brett Hendrickson, created the most outsized position in SandRidge Energy Inc. (NYSE:SD). Nokomis Capital had $0.8 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $0.7 million position during the quarter. The other funds with new positions in the stock are Matthew Hulsizer’s PEAK6 Capital Management, Donald Sussman’s Paloma Partners, and Michael Gelband’s ExodusPoint Capital.

Let’s also examine hedge fund activity in other stocks similar to SandRidge Energy Inc. (NYSE:SD). These stocks are Oak Valley Bancorp (CA) (NASDAQ:OVLY), Aziyo Biologics, Inc. (NASDAQ:AZYO), Hepion Pharmaceuticals, Inc. (NASDAQ:HEPA), Navios Maritime Holdings Inc. (NYSE:NM), Orgenesis Inc. (NASDAQ:ORGS), United Security Bancshares (NASDAQ:UBFO), and Radcom Ltd. (NASDAQ:RDCM). This group of stocks’ market caps resemble SD’s market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position OVLY,1,498,0 AZYO,6,15198,-1 HEPA,4,1131,0 NM,5,8952,4 ORGS,3,1715,1 UBFO,2,1717,-1 RDCM,3,10000,0 Average,3.4,5602,0.4 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 3.4 hedge funds with bullish positions and the average amount invested in these stocks was $6 million. That figure was $41 million in SD’s case. Aziyo Biologics, Inc. (NASDAQ:AZYO) is the most popular stock in this table. On the other hand Oak Valley Bancorp (CA) (NASDAQ:OVLY) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks SandRidge Energy Inc. (NYSE:SD) is more popular among hedge funds. Our overall hedge fund sentiment score for SD is 83.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks returned 28.5% in 2021 through July 23rd but still managed to beat the market by 10.1 percentage points. Hedge funds were also right about betting on SD as the stock returned 42.5% since the end of March (through 7/23) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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Disclosure: None. This article was originally published at Insider Monkey.