Most investors tend to think that hedge funds and other asset managers are worthless, as they cannot beat even simple index fund portfolios. In fact, most people expect hedge funds to compete with and outperform the bull market that we have witnessed over the past few years. However, hedge funds are generally partially hedged and aim at delivering attractive risk-adjusted returns rather than following the ups and downs of equity markets hoping that they will outperform the broader market. Our research shows that hedge funds do have great stock picking skills, so let’s take a glance at the smart money sentiment towards Teekay Tankers Ltd. (NYSE:TNK).
Teekay Tankers Ltd. (NYSE:TNK) investors should pay attention to an increase in support from the world’s most elite money managers of late. Teekay Tankers Ltd. (NYSE:TNK) was in 21 hedge funds’ portfolios at the end of the third quarter of 2015. There were 16 hedge funds in our database with Teekay Tankers Ltd. (NYSE:TNK) positions at the end of the previous quarter. 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 Rentrak Corporation (NASDAQ:RENT), Barracuda Networks Inc (NYSE:CUDA), and Erin Energy Corp (NYSEMKT:ERN) to gather more data points.
Follow Teekay Tankers Ltd (NYSE:TNK)
Follow Teekay Tankers Ltd (NYSE:TNK)
Today, there are plenty of tools market participants employ to value publicly traded companies. Some of the most underrated tools are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the best picks of the top money managers can trounce the broader indices by a significant margin (see the details here).
Keeping this in mind, let’s take a look at the fresh action regarding Teekay Tankers Ltd. (NYSE:TNK).
What have hedge funds been doing with Teekay Tankers Ltd. (NYSE:TNK)?
At the end of September, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 31% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Joe Huber’s Huber Capital Management has the largest position in Teekay Tankers Ltd. (NYSE:TNK), worth close to $65.6 million, accounting for 2.3% of its total 13F portfolio. Sitting at the No. 2 spot is Millennium Management, led by Israel Englander, holding a $23.2 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Remaining professional money managers that are bullish contain Jon Bauer’s Contrarian Capital, Brian Taylor’s Pine River Capital Management and John Segrich and Michael Molnar’s Lorem Ipsum Management.
With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Pine River Capital Management initiated the biggest position in Teekay Tankers Ltd. (NYSE:TNK). Pine River Capital Management had $17.5 million invested in the company at the end of the quarter. Marc Lisker, Glenn Fuhrman and John Phelan’s MSDC Management also made a $14.6 million investment in the stock during the quarter. The following funds were also among the new Teekay Tankers Ltd. (NYSE:TNK) investors: Steve Cohen’s Point72 Asset Management, Daniel Gold’s QVT Financial, and Lorem Ipsum Management.
Let’s now review hedge fund activity in other stocks similar to Teekay Tankers Ltd. (NYSE:TNK). These stocks are Rentrak Corporation (NASDAQ:RENT), Barracuda Networks Inc (NYSE:CUDA), Erin Energy Corp (NYSEMKT:ERN), and Greenlight Capital Re, Ltd. (NASDAQ:GLRE). This group of stocks’ market caps matches Teekay Tankers Ltd. (NYSE:TNK)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RENT | 14 | 117828 | -3 |
| CUDA | 14 | 22294 | -2 |
| ERN | 5 | 1718 | -2 |
| GLRE | 13 | 47731 | -3 |
As you can see, these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $47 million. That figure was $208 million in Teekay Tankers Ltd. (NYSE:TNK)’s case. Rentrak Corporation (NASDAQ:RENT) is the most popular stock in this table. On the other hand, Erin Energy Corp (NYSEMKT:ERN) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks, Teekay Tankers Ltd. (NYSE:TNK) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
