The successful funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at Forum Energy Technologies Inc (NYSE:FET) from the perspective of those successful funds.
Forum Energy Technologies Inc (NYSE:FET) saw an increase in support from the world’s most successful money managers last quarter. There were 16 funds in our database bullish on Forum Energy Technologies at the end of September, compared to 13 funds a quarter earlier. At the end of this article we will also compare FET to other stocks including Harmony Gold Mining Co. (ADR) (NYSE:HMY), Argo Group International Holdings, Ltd. (NASDAQ:AGII), and Ebix Inc (NASDAQ:EBIX) to get a better sense of its popularity.
Follow Forum Energy Technologies Inc. (NYSE:FET)
Follow Forum Energy Technologies Inc. (NYSE:FET)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Keeping this in mind, let’s view the latest action surrounding Forum Energy Technologies Inc (NYSE:FET).
How have hedgies been trading Forum Energy Technologies Inc (NYSE:FET)?
At the end of September, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, up by 23% from the previous quarter. By comparison, 12 hedge funds held shares or bullish call options in FET heading into this year. So, let’s review 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, Ken Griffin’s Citadel Investment Group has the number one position in Forum Energy Technologies Inc (NYSE:FET), worth close to $17 million, amounting to less than 0.1%% of its total 13F portfolio. On Citadel Investment Group’s heels is T Boone Pickens’ BP Capital, which holds a $9.7 million position; 3.5% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions contain Michael Platt and William Reeves’ BlueCrest Capital Mgmt., Steve Cohen’s Point72 Asset Management, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. We should note that BP Capital is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
As aggregate interest increased, specific money managers were breaking ground themselves. Point72 Asset Management assembled the most valuable position in Forum Energy Technologies Inc (NYSE:FET). Point72 Asset Management had $8.9 million invested in the company at the end of the quarter. Arrowstreet Capital also made a $8 million investment in the stock during the quarter. The following funds were also among the new FET investors: Kenneth Tropin’s Graham Capital Management, James Dondero’s Highland Capital Management, and Russell Hawkins’s Hawkins Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Forum Energy Technologies Inc (NYSE:FET) but similarly valued. These stocks are Harmony Gold Mining Co. (ADR) (NYSE:HMY), Argo Group International Holdings, Ltd. (NASDAQ:AGII), Ebix Inc (NASDAQ:EBIX), and Dana Holding Corporation (NYSE:DAN). This group of stocks’ market caps match FET’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HMY | 7 | 28646 | -4 |
| AGII | 13 | 101675 | -5 |
| EBIX | 18 | 163317 | 4 |
| DAN | 26 | 381367 | -1 |
As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $169 million, versus $80 million in FET’s case. Dana Holding Corporation (NYSE:DAN) is the most popular stock in this table. On the other hand Harmony Gold Mining Co. (ADR) (NYSE:HMY) is the least popular one with only seven investors holding long positions. Forum Energy Technologies Inc (NYSE:FET) 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 Dana Holding Corporation (NYSE:DAN) might be a better candidate to consider taking a long position in.
Disclosure: none
