The Insider Monkey team has completed processing the quarterly 13F filings for the June quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Dorian LPG Ltd (NYSE:LPG).
Is Dorian LPG Ltd (NYSE:LPG) a buy here? The best stock pickers were becoming hopeful. The number of long hedge fund positions improved by 1 in recent months. Dorian LPG Ltd (NYSE:LPG) was in 19 hedge funds’ portfolios at the end of June. The all time high for this statistic is 22. Our calculations also showed that LPG isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Cliff Asness of AQR Capital Management
Keeping this in mind we’re going to go over the new hedge fund action surrounding Dorian LPG Ltd (NYSE:LPG).
Do Hedge Funds Think LPG Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from the first quarter of 2020. On the other hand, there were a total of 15 hedge funds with a bullish position in LPG a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Kensico Capital was the largest shareholder of Dorian LPG Ltd (NYSE:LPG), with a stake worth $58.1 million reported as of the end of June. Trailing Kensico Capital was Royce & Associates, which amassed a stake valued at $22.7 million. Arrowstreet Capital, Renaissance Technologies, and Millennium Management 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 Kensico Capital allocated the biggest weight to Dorian LPG Ltd (NYSE:LPG), around 1.68% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, designating 0.52 percent of its 13F equity portfolio to LPG.
Consequently, specific money managers were breaking ground themselves. Wexford Capital, managed by Charles Davidson and Joseph Jacobs, assembled the biggest position in Dorian LPG Ltd (NYSE:LPG). Wexford Capital had $0.7 million invested in the company at the end of the quarter. Cliff Asness’s AQR Capital Management also made a $0.7 million investment in the stock during the quarter. The only other fund with a new position in the stock is Peter Muller’s PDT Partners.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Dorian LPG Ltd (NYSE:LPG) but similarly valued. We will take a look at Eros STX Global Corporation (NYSE:ESGC), Brightcove Inc (NASDAQ:BCOV), Triterras, Inc. (NASDAQ:TRIT), Verso Corporation (NYSE:VRS), Cambridge Bancorp (NASDAQ:CATC), AC Immune SA (NASDAQ:ACIU), and Gilat Satellite Networks Ltd. (NASDAQ:GILT). All of these stocks’ market caps resemble LPG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ESGC | 10 | 24837 | -4 |
| BCOV | 16 | 199892 | -5 |
| TRIT | 10 | 16981 | -2 |
| VRS | 17 | 68479 | 2 |
| CATC | 6 | 20427 | 1 |
| ACIU | 13 | 104856 | 0 |
| GILT | 7 | 25911 | -1 |
| Average | 11.3 | 65912 | -1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.3 hedge funds with bullish positions and the average amount invested in these stocks was $66 million. That figure was $97 million in LPG’s case. Verso Corporation (NYSE:VRS) is the most popular stock in this table. On the other hand Cambridge Bancorp (NASDAQ:CATC) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Dorian LPG Ltd (NYSE:LPG) is more popular among hedge funds. Our overall hedge fund sentiment score for LPG is 81.9. 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 gained 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Unfortunately LPG wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on LPG were disappointed as the stock returned -6.7% since the end of the second quarter (through 10/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
Follow Dorian Lpg Ltd. (NYSE:LPG)
Follow Dorian Lpg Ltd. (NYSE:LPG)
Suggested Articles:
- 12 Undervalued Cyclical Stocks for 2021
- Top 25 Chocolate Producing Countries In the World
- 15 Biggest Tech Companies In The World
Disclosure: None. This article was originally published at Insider Monkey.
