Sandridge Energy (SD) - Speechless

Sandridge Energy (SD) is (was??) one of the top holdings of many of the smartest hedge funds around when J over at Market Folly last looked (3/31 holdings). This is a natural gas play with some great lineage (think Chesapeake Energy (CHK)). I wrote this "way back" on Jun 1 - how quickly things change in this new era.

The other name for you natural gas junkies, and Chesapeake Energy (CHK) fans [May 1: Today's Interesting Reads -> Meet Mr. Gas] is Sandridge Energy (SD), which I've heard of from a couple of places now. First one of our readers, "Madhatter" has a blog where he breaks down some large hedge funds holdings and this name came up when he was analyzing Lone Pine Capital's (Steven Mandel's) holdings, so that perked my attention since I'm on the lookout for interesting natural gas plays. Then the Motley Fool reports the CEO was the cofounder of CHK, so in this type of business you want management who has this level of experience. [May 12: A Chip off the Old Chesapeake] CHK's CEO is infamous for buying stock, he does it in good times or bad which shareholders just have to love - and it looks like Sandridge's CEO Ward is of the same cloth.

I can only guess said hedge funds are puking this position out - I have nothing intelligent to add to this picture.

I will be VERY interested to see these hedge funds updated holdings - both their 6/30/08 holdings and 9/30/08 holdings. My guess is they held the position on 6/30 but began puking it out the past month. We are definitely seeing the signs of capitulation - again, at some point there is "value" in these stocks being systematically destroyed but you simply do not want to get in the way right now - people buying Friday after the nearly 20% loss, thinking they caught a great price, simply are being blown up today. It is dangerous to one's capital right now to even think of buying a commodity stock - just the mere act of thinking about it is costing people 2-3% return ;)

No position