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. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about SFL Corporation Ltd. (NYSE:SFL)?
Hedge fund interest in SFL Corporation Ltd. (NYSE:SFL) shares was flat at the end of last quarter. This is usually a negative indicator. 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 Comstock Resources Inc (NYSE:CRK), TriMas Corp (NASDAQ:TRS), and Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL) to gather more data points. Our calculations also showed that SFL isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
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.
Noam Gottesman of GLG Partners
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, blockchain technology’s influence will go beyond online payments. So, we are checking out this futurist’s moonshot opportunities in tech stocks. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to view the fresh hedge fund action encompassing SFL Corporation Ltd. (NYSE:SFL).
How have hedgies been trading SFL Corporation Ltd. (NYSE:SFL)?
At Q1’s end, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 6 hedge funds with a bullish position in SFL a year ago. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, holds the most valuable position in SFL Corporation Ltd. (NYSE:SFL). Renaissance Technologies has a $12.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second most bullish fund manager is Millennium Management, led by Israel Englander, holding a $11.7 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors with similar optimism consist of Israel Englander’s Millennium Management, Peter Muller’s PDT Partners and Noam Gottesman’s GLG Partners. In terms of the portfolio weights assigned to each position PDT Partners allocated the biggest weight to SFL Corporation Ltd. (NYSE:SFL), around 0.28% of its 13F portfolio. Weld Capital Management is also relatively very bullish on the stock, setting aside 0.14 percent of its 13F equity portfolio to SFL.
Due to the fact that SFL Corporation Ltd. (NYSE:SFL) has faced bearish sentiment from the aggregate hedge fund industry, logic holds that there were a few fund managers that slashed their full holdings in the first quarter. At the top of the heap, Clint Carlson’s Carlson Capital dumped the biggest position of all the hedgies tracked by Insider Monkey, comprising an estimated $16.4 million in stock. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, also dumped its stock, about $5.7 million worth. These bearish behaviors are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as SFL Corporation Ltd. (NYSE:SFL) but similarly valued. We will take a look at Comstock Resources Inc (NYSE:CRK), TriMas Corp (NASDAQ:TRS), Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL), and Kornit Digital Ltd. (NASDAQ:KRNT). This group of stocks’ market caps are similar to SFL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CRK | 3 | 2762 | -4 |
| TRS | 13 | 71796 | -2 |
| MDGL | 15 | 270102 | -4 |
| KRNT | 9 | 28349 | -3 |
| Average | 10 | 93252 | -3.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $93 million. That figure was $44 million in SFL’s case. Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL) is the most popular stock in this table. On the other hand Comstock Resources Inc (NYSE:CRK) is the least popular one with only 3 bullish hedge fund positions. SFL Corporation Ltd. (NYSE:SFL) 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. 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 13.3% in 2020 through June 25th but beat the market by 16.8 percentage points. Unfortunately SFL wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on SFL were disappointed as the stock returned 1.5% during the same time period 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 many of these stocks already outperformed the market so far this year.
Follow Sfl Corporation Ltd. (NYSE:SFL)
Follow Sfl Corporation Ltd. (NYSE:SFL)
Disclosure: None. This article was originally published at Insider Monkey.
