Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track more than 700 prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile gigantic failures like hedge funds’ recent losses in Valeant. Let’s take a closer look at what the funds we track think about San Juan Basin Royalty Trust (NYSE:SJT) in this article.
San Juan Basin Royalty Trust (NYSE:SJT) investors should pay attention to a decrease in enthusiasm from smart money recently. SJT was in 7 hedge funds’ portfolios at the end of September. There were 9 hedge funds in our database with SJT holdings at the end of the previous quarter. At the end of this article we will also compare SJT to other stocks including MainSource Financial Group Inc. (NASDAQ:MSFG), CNinsure Inc. (ADR) (NASDAQ:CISG), and China Cord Blood Corp (NYSE:CO) to get a better sense of its popularity.
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Today there are dozens of signals shareholders can use to size up their stock investments. A couple of the most useful signals are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the top picks of the best money managers can outclass the broader indices by a healthy amount (see the details here).
Now, we’re going to take a peek at the recent action encompassing San Juan Basin Royalty Trust (NYSE:SJT).
What have hedge funds been doing with San Juan Basin Royalty Trust (NYSE:SJT)?
At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a change of -22% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Chuck Royce’s Royce & Associates has the number one position in San Juan Basin Royalty Trust (NYSE:SJT), worth close to $6.1 million, amounting to less than 0.1%% of its total 13F portfolio. The second most bullish fund manager is Ken Griffin of Citadel Investment Group, with an $0.7 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors with similar optimism contain Michael Price’s MFP Investors, Israel Englander’s Millennium Management and John Overdeck and David Siegel’s Two Sigma Advisors.
Due to the fact that San Juan Basin Royalty Trust (NYSE:SJT) has faced falling interest from hedge fund managers, we can see that there was a specific group of fund managers that slashed their entire stakes by the end of the third quarter. It’s worth mentioning that Jim Simons’s Renaissance Technologies dumped the biggest position of all the hedgies monitored by Insider Monkey, valued at an estimated $0.5 million in stock. Gavin Saitowitz and Cisco J. del Valle’s fund, Springbok Capital, also cut its stock, about $0 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 2 funds by the end of the third quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as San Juan Basin Royalty Trust (NYSE:SJT) but similarly valued. These stocks are MainSource Financial Group Inc. (NASDAQ:MSFG), CNinsure Inc. (ADR) (NASDAQ:CISG), China Cord Blood Corp (NYSE:CO), and Cerus Corporation (NASDAQ:CERS). This group of stocks’ market caps are closest to SJT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MSFG | 4 | 5917 | 1 |
| CISG | 4 | 3706 | -4 |
| CO | 6 | 14221 | 1 |
| CERS | 11 | 118012 | 0 |
As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $35 million. That figure was $61 million in SJT’s case. Cerus Corporation (NASDAQ:CERS) is the most popular stock in this table. On the other hand MainSource Financial Group Inc. (NASDAQ:MSFG) is the least popular one with only 4 bullish hedge fund positions. San Juan Basin Royalty Trust (NYSE:SJT) is not the most popular stock in this group, but hedge fund interest is still above average. Even though this may imply it is a stock worth considering, t we’d rather spend our time researching stocks that hedge funds are collectively most bullish on. In this group, CERS might be a better alternative.
