Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 750 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Hoegh LNG Partners LP (NYSE:HMLP) in this article.
Hoegh LNG Partners LP (NYSE:HMLP) has seen a decrease in hedge fund sentiment lately. Our calculations also showed that HMLP isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Joe Huber of Huber Capital Management
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. With all of this in mind let’s review the latest hedge fund action encompassing Hoegh LNG Partners LP (NYSE:HMLP).
How are hedge funds trading Hoegh LNG Partners LP (NYSE:HMLP)?
At the end of the third quarter, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -17% from one quarter earlier. By comparison, 5 hedge funds held shares or bullish call options in HMLP a year ago. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Renaissance Technologies has the largest position in Hoegh LNG Partners LP (NYSE:HMLP), worth close to $11.7 million, amounting to less than 0.1%% of its total 13F portfolio. The second largest stake is held by Israel Englander of Millennium Management, with a $1.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other members of the smart money that hold long positions include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Phil Frohlich’s Prescott Group Capital Management and Joe Huber’s Huber Capital Management. In terms of the portfolio weights assigned to each position Prescott Group Capital Management allocated the biggest weight to Hoegh LNG Partners LP (NYSE:HMLP), around 0.48% of its 13F portfolio. Huber Capital Management is also relatively very bullish on the stock, designating 0.05 percent of its 13F equity portfolio to HMLP.
Judging by the fact that Hoegh LNG Partners LP (NYSE:HMLP) has faced falling interest from the entirety of the hedge funds we track, we can see that there was a specific group of hedgies that elected to cut their entire stakes by the end of the third quarter. Interestingly, Ken Griffin’s Citadel Investment Group cut the largest stake of all the hedgies followed by Insider Monkey, worth close to $0.6 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace was right behind this move, as the fund dumped about $0.3 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 1 funds by the end of the third quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Hoegh LNG Partners LP (NYSE:HMLP) but similarly valued. These stocks are SunCoke Energy, Inc (NYSE:SXC), Cheetah Mobile Inc (NYSE:CMCM), Heritage Commerce Corp. (NASDAQ:HTBK), and Barings BDC, Inc. (NYSE:BBDC). This group of stocks’ market valuations are closest to HMLP’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SXC | 18 | 97942 | -2 |
| CMCM | 4 | 9245 | -2 |
| HTBK | 9 | 26610 | 1 |
| BBDC | 10 | 29682 | -3 |
| Average | 10.25 | 40870 | -1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $41 million. That figure was $17 million in HMLP’s case. SunCoke Energy, Inc (NYSE:SXC) is the most popular stock in this table. On the other hand Cheetah Mobile Inc (NYSE:CMCM) is the least popular one with only 4 bullish hedge fund positions. Hoegh LNG Partners LP (NYSE:HMLP) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately HMLP wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); HMLP investors were disappointed as the stock returned 2.9% during the first two months of the fourth quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
