We are still in an overall bull market and many stocks that smart money investors were piling into surged through October 17th. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 45% and 39% respectively. Hedge funds’ top 3 stock picks returned 34.4% this year and beat the S&P 500 ETFs by 13 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Costamare Inc (NYSE:CMRE).
Is Costamare Inc (NYSE:CMRE) a safe investment right now? The best stock pickers are in a bullish mood. The number of bullish hedge fund bets moved up by 1 recently. Our calculations also showed that CMRE 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.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. 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 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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 review the latest hedge fund action surrounding Costamare Inc (NYSE:CMRE).
Hedge fund activity in Costamare Inc (NYSE:CMRE)
Heading into the third quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 11% from the previous quarter. On the other hand, there were a total of 7 hedge funds with a bullish position in CMRE a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies holds the number one position in Costamare Inc (NYSE:CMRE). Renaissance Technologies has a $11.8 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $2.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other professional money managers that are bullish comprise Murray Stahl’s Horizon Asset Management, Israel Englander’s Millennium Management and John Overdeck and David Siegel’s Two Sigma Advisors.
As industrywide interest jumped, key hedge funds were leading the bulls’ herd. Stevens Capital Management, managed by Matthew Tewksbury, established the most outsized position in Costamare Inc (NYSE:CMRE). Stevens Capital Management had $0.1 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $0.1 million position during the quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Costamare Inc (NYSE:CMRE) but similarly valued. We will take a look at Heritage-Crystal Clean, Inc. (NASDAQ:HCCI), Pzena Investment Management Inc (NYSE:PZN), Barrett Business Services, Inc. (NASDAQ:BBSI), and Huami Corporation (NYSE:HMI). This group of stocks’ market values are closest to CMRE’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HCCI | 9 | 68760 | -3 |
| PZN | 6 | 18972 | -1 |
| BBSI | 11 | 81420 | -2 |
| HMI | 6 | 11514 | 2 |
| Average | 8 | 45167 | -1 |
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 $18 million in CMRE’s case. Barrett Business Services, Inc. (NASDAQ:BBSI) is the most popular stock in this table. On the other hand Pzena Investment Management Inc (NYSE:PZN) is the least popular one with only 6 bullish hedge fund positions. Costamare Inc (NYSE:CMRE) 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 CMRE as the stock returned 20.4% 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.
