Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow over 700 of the best-performing investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Independence Contract Drilling Inc (NYSE:ICD), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Hedge fund interest in Independence Contract Drilling Inc shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare ICD to other stocks, including Derma Sciences Inc (NASDAQ:DSCI), Commercial Vehicle Group, Inc. (NASDAQ:CVGI), and Golden Entertainment Inc (NASDAQ:GDEN) to get a better sense of its popularity.
Follow Independence Contract Drilling Inc. (NYSE:ICD)
Follow Independence Contract Drilling Inc. (NYSE:ICD)
Today there are plenty of tools stock market investors can use to appraise publicly traded companies. Two of the most useful tools are hedge fund and insider trading activity. We have shown that, historically, those who follow the top picks of the top money managers can outpace their index-focused peers by a superb margin (see the details here).
Keeping this in mind, we’re going to review the new action regarding Independence Contract Drilling Inc (NYSE:ICD).
Hedge fund activity in Independence Contract Drilling Inc (NYSE:ICD)
At the end of the third quarter, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, unchanged from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Phill Gross and Robert Atchinson’s Adage Capital Management has the largest position in Independence Contract Drilling Inc (NYSE:ICD), worth close to $2.7 million, accounting for less than 0.1%% of its total 13F portfolio. On Adage Capital Management’s heels is Driehaus Capital, managed by Richard Driehaus, which holds a $1.8 million position; 0.1% of its 13F portfolio is allocated to the company. The remaining members of the smart money that hold long positions include Gary Claar’s Claar Advisors, Kevin Michael Ulrich and Anthony Davis’s Anchorage Advisors and Jim Simons’ Renaissance Technologies.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s check out hedge fund activity in other stocks similar to Independence Contract Drilling Inc (NYSE:ICD). These stocks are Derma Sciences Inc (NASDAQ:DSCI), Commercial Vehicle Group, Inc. (NASDAQ:CVGI), Golden Entertainment Inc (NASDAQ:GDEN), and Upland Software Inc (NASDAQ:UPLD). This group of stocks’ market valuations resemble ICD’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DSCI | 17 | 59649 | 0 |
| CVGI | 15 | 27611 | 2 |
| GDEN | 7 | 21102 | 1 |
| UPLD | 4 | 2966 | 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 $28 million, compared to just $7 million in ICD’s case. Derma Sciences Inc (NASDAQ:DSCI) is the most popular stock in this table, while Upland Software Inc (NASDAQ:UPLD) is the least popular one with only 4 bullish hedge fund positions. Independence Contract Drilling Inc (NYSE:ICD) 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 DSCI might be a better candidate to consider a long position.