Do Hedge Funds Love Seacor Holdings, Inc. (CKH)?

The elite funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at Seacor Holdings, Inc. (NYSE:CKH) from the perspective of those elite funds.

Amid a slump in oil prices, Seacor Holdings, Inc. (NYSE:CKH)’s stock is losing ground and hedge funds are reducing their bets on the stock. The number of long hedge fund bets dropped by 3 lately. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Aimmune Therapeutics Inc (NASDAQ:AIMT), Knoll Inc (NYSE:KNL), and Merit Medical Systems, Inc. (NASDAQ:MMSI) to gather more data points.

To the average investor there are plenty of methods investors use to assess publicly traded companies. A pair of the most useful methods are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the top picks of the top investment managers can outclass their index-focused peers by a significant margin (see the details here).

Keeping this in mind, we’re going to analyze the key action regarding Seacor Holdings, Inc. (NYSE:CKH).

Hedge fund activity in Seacor Holdings, Inc. (NYSE:CKH)

At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 20% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Royce & Associates, managed by Chuck Royce, holds the largest position in Seacor Holdings, Inc. (NYSE:CKH). Royce & Associates has a $131.5 million position in the stock, comprising 0.7% of its 13F portfolio. The second largest stake is held by Amici Capital, managed by Paul Orlin and Alex Porter, which holds a $68.6 million position; 3.3% of its 13F portfolio is allocated to the company. Other peers with similar optimism contain D. E. Shaw’s D E Shaw, Joe Huber’s Huber Capital Management, and Israel Englander’s Millennium Management.

Since Seacor Holdings, Inc. (NYSE:CKH) has experienced a declining sentiment from the entirety of the hedge funds we track, we can see that there is a sect of money managers who were dropping their entire stakes by the end of the third quarter. Intriguingly, Philippe Jabre’s Jabre Capital Partners cut the biggest position of the “upper crust” of funds tracked by Insider Monkey, valued at close to $6.7 million in stock, and Martin Whitman’s Third Avenue Management was right behind this move, as the fund sold off about $4.5 million worth of shares. These moves are interesting, as total hedge fund interest dropped by 3 funds by the end of the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Seacor Holdings, Inc. (NYSE:CKH). We will take a look at Aimmune Therapeutics Inc (NASDAQ:AIMT), Knoll Inc (NYSE:KNL), Merit Medical Systems, Inc. (NASDAQ:MMSI), and Universal Insurance Holdings, Inc. (NYSEAMEX:UVE). This group of stocks’ market caps are similar to CKH’s market cap.

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $91 million, which is lower than the $213 million in CKH’s case. Merit Medical Systems, Inc. (NASDAQ:MMSI) and Universal Insurance Holdings, Inc. (NYSEAMEX:UVE) are the most popular stocks in this table. On the other hand Aimmune Therapeutics Inc (NASDAQ:AIMT) and Knoll Inc (NYSE:KNL) are the least popular ones with only 10 bullish hedge fund positions. Seacor Holdings, Inc. (NYSE:CKH) 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 MMSI and UVE might be better candidates to consider a long position.