With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter. One of these stocks was Dorian LPG Ltd (NYSE:LPG).
Dorian LPG Ltd (NYSE:LPG) investors should be aware of an increase in support from the world’s most elite money managers in recent months. Our calculations also showed that LPG isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 25.7% through September 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to take a glance at the key hedge fund action surrounding Dorian LPG Ltd (NYSE:LPG).
Hedge fund activity in Dorian LPG Ltd (NYSE:LPG)
At the end of the second quarter, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 11% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards LPG over the last 16 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
Among these funds, Kensico Capital held the most valuable stake in Dorian LPG Ltd (NYSE:LPG), which was worth $72.3 million at the end of the second quarter. On the second spot was Royce & Associates which amassed $20.3 million worth of shares. Moreover, Citadel Investment Group, Renaissance Technologies, and GLG Partners were also bullish on Dorian LPG Ltd (NYSE:LPG), allocating a large percentage of their portfolios to this stock.
Consequently, key money managers have been driving this bullishness. PEAK6 Capital Management, managed by Matthew Hulsizer, created the largest call position in Dorian LPG Ltd (NYSE:LPG). PEAK6 Capital Management had $0.3 million invested in the company at the end of the quarter. Peter Muller’s PDT Partners also initiated a $0.2 million position during the quarter. The only other fund with a new position in the stock is Michael Gelband’s ExodusPoint Capital.
Let’s now take a look at 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 ShotSpotter, Inc. (NASDAQ:SSTI), Pennsylvania Real Estate Investment Trust (NYSE:PEI), Century Bancorp, Inc. (NASDAQ:CNBKA), and Puma Biotechnology Inc (NASDAQ:PBYI). All of these stocks’ market caps match LPG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SSTI | 6 | 23044 | -1 |
| PEI | 6 | 10259 | -2 |
| CNBKA | 3 | 14692 | 1 |
| PBYI | 17 | 130423 | -6 |
| Average | 8 | 44605 | -2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $45 million. That figure was $102 million in LPG’s case. Puma Biotechnology Inc (NASDAQ:PBYI) is the most popular stock in this table. On the other hand Century Bancorp, Inc. (NASDAQ:CNBKA) is the least popular one with only 3 bullish hedge fund positions. Dorian LPG Ltd (NYSE:LPG) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Hedge funds were also right about betting on LPG as the stock returned 14.9% during the third quarter and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
