Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.
In this article, we will take a closer look at Seacor Holdings, Inc. (NYSE:CKH), whose shares didn’t see a lot of action during the third quarter. Overall, the hedge fund sentiment was unchanged and he stock was included in the 13F portfolios of 12 funds from our database at the end of September. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Usa Compression Partners LP (NYSE:USAC), 8Point3 Energy Partners LP (NASDAQ:CAFD), and The Andersons, Inc. (NASDAQ:ANDE) to gather more data points.
Follow Seacor Holdings Inc W (NYSE:CKH)
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We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.
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With all of this in mind, let’s take a look at the latest action encompassing Seacor Holdings, Inc. (NYSE:CKH).
Hedge fund activity in Seacor Holdings, Inc. (NYSE:CKH)
At the end of the third quarter, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, unchanged over the quarter. The graph below displays the number of hedge funds with bullish position in CKH over the last five quarters. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Chuck Royce’s Royce & Associates has the number one position in Seacor Holdings, Inc. (NYSE:CKH), worth close to $81 million, accounting for 0.5% of its total 13F portfolio. Sitting at the No. 2 spot is Mason Hawkins of Southeastern Asset Management, with a $52.8 million position; 0.5% of its 13F portfolio is allocated to the stock. Other peers that hold long positions include Thomas E. Claugus’s GMT Capital, Renaissance Technologies, one of the largest hedge funds in the world, and Paul Orlin and Alex Porter’s Amici Capital. We should note that Southeastern Asset Management 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.
On the other hand, some hedge funds decided to get rid of their positions entirely during the third quarter. It’s worth mentioning that First Eagle Investment Management got rid of the largest position of the 700 funds watched by Insider Monkey, comprising close to $5.6 million in stock. Steve Cohen’s fund, Point72 Asset Management, also sold off its stock, about $2.6 million worth.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Seacor Holdings, Inc. (NYSE:CKH) but similarly valued. We will take a look at Usa Compression Partners LP (NYSE:USAC), 8Point3 Energy Partners LP (NASDAQ:CAFD), The Andersons, Inc. (NASDAQ:ANDE), and Repligen Corporation (NASDAQ:RGEN). This group of stocks’ market valuations match CKH’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| USAC | 6 | 10534 | 0 |
| CAFD | 12 | 47538 | 4 |
| ANDE | 12 | 48680 | 3 |
| RGEN | 14 | 63917 | 0 |
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 $43 million. That figure was $208 million in CKH’s case. Repligen Corporation (NASDAQ:RGEN) is the most popular stock in this table. On the other hand Usa Compression Partners LP (NYSE:USAC) is the least popular one with only six bullish hedge fund positions. Seacor Holdings, Inc. (NYSE:CKH) 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. In this regard Repligen Corporation might be a better candidate to consider taking a long position in.
Disclosure: none
