The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of SEACOR Marine Holdings Inc. (NYSE:SMHI).
SEACOR Marine Holdings Inc. (NYSE:SMHI) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 6 hedge funds’ portfolios at the end of March. At the end of this article we will also compare SMHI to other stocks including FIRST FINANCIAL NORTHWEST, INC. (NASDAQ:FFNW), Adams Resources & Energy Inc (NYSE:AE), and PowerFleet, Inc. (NASDAQ:PWFL) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Martin Whitman of Third Avenue Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to go over the key hedge fund action surrounding SEACOR Marine Holdings Inc. (NYSE:SMHI).
How have hedgies been trading SEACOR Marine Holdings Inc. (NYSE:SMHI)?
At Q1’s end, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SMHI over the last 18 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in SEACOR Marine Holdings Inc. (NYSE:SMHI) was held by Royce & Associates, which reported holding $6.9 million worth of stock at the end of September. It was followed by Third Avenue Management with a $1.6 million position. Other investors bullish on the company included D E Shaw, Cove Street Capital, and Renaissance Technologies. In terms of the portfolio weights assigned to each position Third Avenue Management allocated the biggest weight to SEACOR Marine Holdings Inc. (NYSE:SMHI), around 0.23% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, earmarking 0.09 percent of its 13F equity portfolio to SMHI.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Citadel Investment Group. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Millennium Management).
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as SEACOR Marine Holdings Inc. (NYSE:SMHI) but similarly valued. These stocks are FIRST FINANCIAL NORTHWEST, INC. (NASDAQ:FFNW), Adams Resources & Energy Inc (NYSE:AE), PowerFleet, Inc. (NASDAQ:PWFL), and InflaRx N.V. (NASDAQ:IFRX). This group of stocks’ market valuations are similar to SMHI’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FFNW | 1 | 6754 | 0 |
| AE | 4 | 9723 | -2 |
| PWFL | 12 | 21319 | -3 |
| IFRX | 9 | 15958 | 3 |
| Average | 6.5 | 13439 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.5 hedge funds with bullish positions and the average amount invested in these stocks was $13 million. That figure was $10 million in SMHI’s case. PowerFleet, Inc. (NASDAQ:PWFL) is the most popular stock in this table. On the other hand FIRST FINANCIAL NORTHWEST, INC. (NASDAQ:FFNW) is the least popular one with only 1 bullish hedge fund positions. SEACOR Marine Holdings Inc. (NYSE:SMHI) 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. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th and surpassed the market by 14.2 percentage points. Unfortunately SMHI wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); SMHI investors were disappointed as the stock returned -10.3% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.
