Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Amazon, Facebook and Alibaba, have not done well in Q4 due to various reasons. Nevertheless, the data show elite investors’ consensus picks have done well on average over the long-term. The top 20 stocks among hedge funds beat the S&P 500 Index ETF by more than 6 percentage points so far this year. Because their consensus picks have done well, we pay attention to what elite funds think before doing extensive research on a stock. In this article, we take a closer look at Forum Energy Technologies Inc (NYSE:FET) from the perspective of those elite funds.
Forum Energy Technologies Inc (NYSE:FET) was in 16 hedge funds’ portfolios at the end of March. FET shareholders have witnessed an increase in hedge fund interest of late. There were 11 hedge funds in our database with FET holdings at the end of the previous quarter. Our calculations also showed that fet isn’t among the 30 most popular stocks among hedge funds.
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’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were 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’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to take a look at the latest hedge fund action encompassing Forum Energy Technologies Inc (NYSE:FET).
What have hedge funds been doing with Forum Energy Technologies Inc (NYSE:FET)?
At the end of the first quarter, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 45% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards FET over the last 15 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Millennium Management, managed by Israel Englander, holds the biggest position in Forum Energy Technologies Inc (NYSE:FET). Millennium Management has a $24.4 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Millennium Management’s heels is Citadel Investment Group, managed by Ken Griffin, which holds a $10.2 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other members of the smart money that are bullish comprise Jim Simons’s Renaissance Technologies, D. E. Shaw’s D E Shaw and Chuck Royce’s Royce & Associates.
As aggregate interest increased, specific money managers have jumped into Forum Energy Technologies Inc (NYSE:FET) headfirst. Blue Mountain Capital, managed by Andrew Feldstein and Stephen Siderow, assembled the biggest position in Forum Energy Technologies Inc (NYSE:FET). Blue Mountain Capital had $0.8 million invested in the company at the end of the quarter. Ben Gambill’s Tiger Eye Capital also made a $0.5 million investment in the stock during the quarter. The following funds were also among the new FET investors: Paul Marshall and Ian Wace’s Marshall Wace LLP, Paul Tudor Jones’s Tudor Investment Corp, and Hoon Kim’s Quantinno Capital.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Forum Energy Technologies Inc (NYSE:FET) but similarly valued. We will take a look at Bank of Marin Bancorp (NASDAQ:BMRC), Stemline Therapeutics Inc (NASDAQ:STML), HarborOne Bancorp, Inc. (NASDAQ:HONE), and Ingles Markets, Incorporated (NASDAQ:IMKTA). All of these stocks’ market caps are similar to FET’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BMRC | 7 | 18453 | 1 |
| STML | 20 | 188610 | 5 |
| HONE | 4 | 7730 | 0 |
| IMKTA | 11 | 43072 | 1 |
| Average | 10.5 | 64466 | 1.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $64 million. That figure was $49 million in FET’s case. Stemline Therapeutics Inc (NASDAQ:STML) is the most popular stock in this table. On the other hand HarborOne Bancorp, Inc. (NASDAQ:HONE) is the least popular one with only 4 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. This is a slightly positive signal but 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 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately FET wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on FET were disappointed as the stock returned -29.5% during the same period 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 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
