Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don’t make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards Forum Energy Technologies Inc (NYSE:FET) to find out whether there were any major changes in hedge funds’ views.
Is FET stock a buy? The smart money was betting on the stock. The number of long hedge fund positions went up by 2 lately. Forum Energy Technologies Inc (NYSE:FET) was in 5 hedge funds’ portfolios at the end of March. The all time high for this statistic is 20. Our calculations also showed that FET isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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Do Hedge Funds Think FET Is A Good Stock To Buy Now?
At Q1’s end, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 67% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards FET over the last 23 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
More specifically, Newtyn Management was the largest shareholder of Forum Energy Technologies Inc (NYSE:FET), with a stake worth $2.8 million reported as of the end of March. Trailing Newtyn Management was Millennium Management, which amassed a stake valued at $0.4 million. Arrowstreet Capital, Renaissance Technologies, and Tudor Investment Corp 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 Newtyn Management allocated the biggest weight to Forum Energy Technologies Inc (NYSE:FET), around 0.75% of its 13F portfolio. Tudor Investment Corp is also relatively very bullish on the stock, setting aside 0.01 percent of its 13F equity portfolio to FET.
With a general bullishness amongst the heavyweights, key money managers have jumped into Forum Energy Technologies Inc (NYSE:FET) headfirst. Millennium Management, managed by Israel Englander, created the biggest position in Forum Energy Technologies Inc (NYSE:FET). Millennium Management had $0.4 million invested in the company at the end of the quarter. Renaissance Technologies also made a $0.3 million investment in the stock during the quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Forum Energy Technologies Inc (NYSE:FET). We will take a look at Magal Security Systems Ltd. (NASDAQ:MAGS), Frequency Electronics, Inc. (NASDAQ:FEIM), Actinium Pharmaceuticals Inc (NYSE:ATNM), Pro-Dex, Inc. (NASDAQ:PDEX), Celsion Corporation (NASDAQ:CLSN), FreightCar America, Inc. (NASDAQ:RAIL), and Kingsway Financial Services Inc. (NYSE:KFS). All of these stocks’ market caps resemble FET’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MAGS | 2 | 3403 | 0 |
| FEIM | 2 | 10573 | 0 |
| ATNM | 1 | 350 | -8 |
| PDEX | 1 | 433 | -1 |
| CLSN | 2 | 49 | 2 |
| RAIL | 8 | 8749 | 0 |
| KFS | 3 | 2114 | 1 |
| Average | 2.7 | 3667 | -0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 2.7 hedge funds with bullish positions and the average amount invested in these stocks was $4 million. That figure was $4 million in FET’s case. FreightCar America, Inc. (NASDAQ:RAIL) is the most popular stock in this table. On the other hand Actinium Pharmaceuticals Inc (NYSE:ATNM) is the least popular one with only 1 bullish hedge fund positions. Forum Energy Technologies Inc (NYSE:FET) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FET is 43.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.4% in 2021 through June 18th and still beat the market by 6.1 percentage points. Hedge funds were also right about betting on FET as the stock returned 25.2% since the end of Q1 (through 6/18) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Forum Energy Technologies Inc. (NYSE:FET)
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Disclosure: None. This article was originally published at Insider Monkey.
