Is Performance Shipping Inc. (PSHG) A Good Stock To Buy Now?

In this article we will take a look at whether hedge funds think Performance Shipping Inc. (NASDAQ:PSHG) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.

Is PSHG a good stock to buy? Performance Shipping Inc. (NASDAQ:PSHG) shareholders have witnessed an increase in hedge fund sentiment of late. Performance Shipping Inc. (NASDAQ:PSHG) was in 3 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 2. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that PSHG isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

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. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

David Siegel of Two Sigma Advisors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to go over the key hedge fund action surrounding Performance Shipping Inc. (NASDAQ:PSHG).

Do Hedge Funds Think PSHG Is A Good Stock To Buy Now?

At the end of the first quarter, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 200% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards PSHG over the last 23 quarters. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).

More specifically, Renaissance Technologies was the largest shareholder of Performance Shipping Inc. (NASDAQ:PSHG), with a stake worth $0.6 million reported as of the end of March. Trailing Renaissance Technologies was Two Sigma Advisors, which amassed a stake valued at $0.4 million. Citadel Investment Group was 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 Two Sigma Advisors allocated the biggest weight to Performance Shipping Inc. (NASDAQ:PSHG), around 0.0011% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, dishing out 0.0007 percent of its 13F equity portfolio to PSHG.

As one would reasonably expect, specific money managers were leading the bulls’ herd. Two Sigma Advisors, managed by John Overdeck and David Siegel, assembled the most outsized position in Performance Shipping Inc. (NASDAQ:PSHG). Two Sigma Advisors had $0.4 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.1 million position during the quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Performance Shipping Inc. (NASDAQ:PSHG) but similarly valued. We will take a look at Tenax Therapeutics Inc (NASDAQ:TENX), Unico American Corporation (NASDAQ:UNAM), Summer Infant, Inc. (NASDAQ:SUMR), AmpliTech Group, Inc. (NASDAQ:AMPG), Reliance Global Group, Inc. (NASDAQ:RELI), Carver Bancorp, Inc. (NASDAQ:CARV), and GeoVax Labs, Inc. (NASDAQ:GOVX). All of these stocks’ market caps resemble PSHG’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 2 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $1 million in PSHG’s case. Tenax Therapeutics Inc (NASDAQ:TENX) is the most popular stock in this table. On the other hand Unico American Corporation (NASDAQ:UNAM) is the least popular one with only 1 bullish hedge fund positions. Performance Shipping Inc. (NASDAQ:PSHG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PSHG is 87. 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. 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 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 17.2% in 2021 through June 11th and beat the market again by 3.3 percentage points. Unfortunately PSHG wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on PSHG were disappointed as the stock returned -3.8% since the end of March (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

Disclosure: None. This article was originally published at Insider Monkey.