We can judge whether Eagle Bulk Shipping Inc. (NASDAQ:EGLE) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, research shows that these picks historically outperformed the market when we factor in known risk factors.
Eagle Bulk Shipping Inc. (NASDAQ:EGLE) shareholders have witnessed a slight increase in enthusiasm from smart money of late. EGLE was in 5 hedge funds’ portfolios at the end of September. There were 4 hedge funds in our database with EGLE holdings at the end of the previous quarter. At the end of this article we will also compare EGLE to other stocks including PICO Holdings Inc (NASDAQ:PICO), Ducommun Incorporated (NYSE:DCO), and Eaton Vance Senior Income Trust (NYSE:EVF) to get a better sense of its popularity.
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In the eyes of most market participants, hedge funds are seen as underperforming, outdated financial tools of the past. While there are over 8000 funds in operation at the moment, Our researchers hone in on the aristocrats of this club, about 700 funds. These investment experts manage bulk of all hedge funds’ total capital, and by observing their inimitable picks, Insider Monkey has unearthed many investment strategies that have historically defeated Mr. Market. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points a year for a decade in their back tests.
With all of this in mind, let’s review the new action encompassing Eagle Bulk Shipping Inc. (NASDAQ:EGLE).
How have hedgies been trading Eagle Bulk Shipping Inc. (NASDAQ:EGLE)?
Heading into Q4, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Howard Marks’ Oaktree Capital Management has the most valuable position in Eagle Bulk Shipping Inc. (NASDAQ:EGLE), worth close to $93.1 million, comprising 1.2% of its total 13F portfolio. Sitting at the No. 2 spot is Steven Tananbaum’s GoldenTree Asset Management, with a $35 million position; 5.7% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors with similar optimism comprise Joshua Friedman and Mitchell Julis’s Canyon Capital Advisors, Geoffrey Raynor’s Q Investments (Specter Holdings) and Don Morgan’s Brigade Capital.
With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Q Investments (Specter Holdings) created the biggest position in Eagle Bulk Shipping Inc. (NASDAQ:EGLE). Q Investments (Specter Holdings) had $4 million invested in the company at the end of the quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Eagle Bulk Shipping Inc. (NASDAQ:EGLE) but similarly valued. These stocks are PICO Holdings Inc (NASDAQ:PICO), Ducommun Incorporated (NYSE:DCO), Eaton Vance Senior Income Trust (NYSE:EVF), and Liquidity Services, Inc. (NASDAQ:LQDT). All of these stocks’ market caps are closest to EGLE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PICO | 11 | 34940 | 1 |
| DCO | 12 | 14462 | 3 |
| EVF | 4 | 6974 | 1 |
| LQDT | 17 | 20811 | 1 |
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $19 million, significantly below the $161 million figure in EGLE’s case. Liquidity Services, Inc. (NASDAQ:LQDT) is the most popular stock in this table. On the other hand Eaton Vance Senior Income Trust (NYSE:EVF) is the least popular one with only 4 bullish hedge fund positions. Eagle Bulk Shipping Inc. (NASDAQ:EGLE) 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. In this regard LQDT might be a better candidate to consider a long position.
