As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the third quarter. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Star Bulk Carriers Corp. (NASDAQ:SBLK).
Is Star Bulk Carriers Corp. (NASDAQ:SBLK) the right investment to pursue these days? Prominent investors are taking a bullish view. The number of long hedge fund bets advanced by 1 recently. Our calculations also showed that SBLK isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). SBLK was in 12 hedge funds’ portfolios at the end of the third quarter of 2019. There were 11 hedge funds in our database with SBLK positions at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
At the moment there are several methods shareholders use to evaluate their holdings. A couple of the most innovative methods are hedge fund and insider trading moves. We have shown that, historically, those who follow the best picks of the elite hedge fund managers can outperform the market by a healthy margin (see the details here).
Howard Marks of Oaktree 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 based on an under-the-radar fund manager’s investor letter and the stock gained 20 percent. Let’s go over the key hedge fund action surrounding Star Bulk Carriers Corp. (NASDAQ:SBLK).
How have hedgies been trading Star Bulk Carriers Corp. (NASDAQ:SBLK)?
At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 9% from one quarter earlier. By comparison, 16 hedge funds held shares or bullish call options in SBLK 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.
Among these funds, Oaktree Capital Management held the most valuable stake in Star Bulk Carriers Corp. (NASDAQ:SBLK), which was worth $383.3 million at the end of the third quarter. On the second spot was Impala Asset Management which amassed $34.7 million worth of shares. Renaissance Technologies, Horseman Capital Management, and QVT Financial 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 Oaktree Capital Management allocated the biggest weight to Star Bulk Carriers Corp. (NASDAQ:SBLK), around 7.52% of its 13F portfolio. Impala Asset Management is also relatively very bullish on the stock, earmarking 2.51 percent of its 13F equity portfolio to SBLK.
Consequently, specific money managers have been driving this bullishness. ExodusPoint Capital, managed by Michael Gelband, initiated the most outsized position in Star Bulk Carriers Corp. (NASDAQ:SBLK). ExodusPoint Capital had $0.2 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also initiated a $0.2 million position during the quarter.
Let’s go over hedge fund activity in other stocks similar to Star Bulk Carriers Corp. (NASDAQ:SBLK). These stocks are Hudbay Minerals Inc. (NYSE:HBM), QAD Inc. (NASDAQ:QADA), Athenex, Inc. (NASDAQ:ATNX), and Epizyme Inc (NASDAQ:EPZM). All of these stocks’ market caps resemble SBLK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HBM | 13 | 136771 | 1 |
| QADA | 14 | 128085 | 3 |
| ATNX | 15 | 276846 | 5 |
| EPZM | 17 | 265859 | -4 |
| Average | 14.75 | 201890 | 1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.75 hedge funds with bullish positions and the average amount invested in these stocks was $202 million. That figure was $446 million in SBLK’s case. Epizyme Inc (NASDAQ:EPZM) is the most popular stock in this table. On the other hand Hudbay Minerals Inc. (NYSE:HBM) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Star Bulk Carriers Corp. (NASDAQ:SBLK) is even less popular than HBM. 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. A small number of hedge funds were also right about betting on SBLK, though not to the same extent, as the stock returned 9.6% during the fourth quarter (through 11/30) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
