Teekay Corporation (NYSE:TK) investors should be aware of a decrease in hedge fund interest of late.
If you’d ask most market participants, hedge funds are viewed as worthless, outdated investment vehicles of yesteryear. While there are greater than 8000 funds trading at the moment, we hone in on the leaders of this club, about 450 funds. Most estimates calculate that this group oversees the lion’s share of the smart money’s total capital, and by keeping an eye on their best picks, we have found a few investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 25 percentage points in 6.5 month (see the details here).
Equally as beneficial, positive insider trading activity is a second way to parse down the marketplace. There are many stimuli for a bullish insider to downsize shares of his or her company, but just one, very clear reason why they would buy. Several empirical studies have demonstrated the impressive potential of this strategy if you understand what to do (learn more here).
With these “truths” under our belt, it’s important to take a glance at the key action encompassing Teekay Corporation (NYSE:TK).
What have hedge funds been doing with Teekay Corporation (NYSE:TK)?
Heading into 2013, a total of 14 of the hedge funds we track were bullish in this stock, a change of 0% from one quarter earlier. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes meaningfully.
When looking at the hedgies we track, Eton Park Capital, managed by Eric Mindich, holds the largest position in Teekay Corporation (NYSE:TK). Eton Park Capital has a $161 million call position in the stock, comprising 3.3% of its 13F portfolio. Coming in second is Alec Litowitz and Ross Laser of Magnetar Capital, with a $100 million position; 1.3% of its 13F portfolio is allocated to the company. Remaining hedgies with similar optimism include Christian Leone’s Luxor Capital Group, Jacob Doft’s Highline Capital Management and Barry Rosenstein’s JANA Partners.
Due to the fact that Teekay Corporation (NYSE:TK) has experienced a declination in interest from hedge fund managers, it’s easy to see that there were a few hedge funds that elected to cut their full holdings at the end of the year. It’s worth mentioning that Douglas Hirsch’s Seneca Capital said goodbye to the biggest position of the 450+ funds we track, worth an estimated $10 million in stock.. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, also dumped its stock, about $0 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
How are insiders trading Teekay Corporation (NYSE:TK)?
Insider trading activity, especially when it’s bullish, is most useful when the company in focus has experienced transactions within the past six months. Over the last half-year time period, Teekay Corporation (NYSE:TK) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Teekay Corporation (NYSE:TK). These stocks are Golar LNG Partners LP (NASDAQ:GMLP), Golar LNG Limited (USA) (NASDAQ:GLNG), Teekay LNG Partners L.P. (NYSE:TGP), Teekay Offshore Partners L.P. (NYSE:TOO), and Tidewater Inc. (NYSE:TDW). This group of stocks belong to the shipping industry and their market caps resemble TK’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Golar LNG Partners LP (NASDAQ:GMLP) | 6 | 0 | 0 |
| Golar LNG Limited (USA) (NASDAQ:GLNG) | 21 | 0 | 0 |
| Teekay LNG Partners L.P. (NYSE:TGP) | 5 | 0 | 0 |
| Teekay Offshore Partners L.P. (NYSE:TOO) | 4 | 0 | 0 |
| Tidewater Inc. (NYSE:TDW) | 12 | 0 | 4 |
With the returns shown by Insider Monkey’s strategies, everyday investors should always pay attention to hedge fund and insider trading activity, and Teekay Corporation (NYSE:TK) is no exception.
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Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.
