Should You Avoid Safe Bulkers, Inc. (SB)?

Safe Bulkers, Inc. (NYSE:SB) investors should pay attention to a decrease in hedge fund interest lately.

In today’s marketplace, there are a multitude of metrics market participants can use to monitor Mr. Market. Some of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite hedge fund managers can outpace the broader indices by a significant margin (see just how much).

Just as beneficial, positive insider trading activity is another way to break down the financial markets. As the old adage goes: there are a variety of stimuli for a corporate insider to drop shares of his or her company, but only one, very simple reason why they would buy. Plenty of empirical studies have demonstrated the impressive potential of this tactic if you understand where to look (learn more here).

Now, it’s important to take a gander at the recent action surrounding Safe Bulkers, Inc. (NYSE:SB).

Hedge fund activity in Safe Bulkers, Inc. (NYSE:SB)

In preparation for this quarter, a total of 5 of the hedge funds we track held long positions in this stock, a change of -29% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably.

When looking at the hedgies we track, Regiment Capital, managed by Timothy S. Peterson, holds the most valuable position in Safe Bulkers, Inc. (NYSE:SB). Regiment Capital has a $7.8 million position in the stock, comprising 1.7% of its 13F portfolio. Coming in second is Citadel Investment Group, managed by Ken Griffin, which held a $0.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedgies with similar optimism include John Overdeck and David Siegel’s Two Sigma Advisors, D. E. Shaw’s D E Shaw and Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners.

Because Safe Bulkers, Inc. (NYSE:SB) has witnessed falling interest from the entirety of the hedge funds we track, it’s easy to see that there exists a select few funds who were dropping their full holdings last quarter. At the top of the heap, Jim Simons’s Renaissance Technologies sold off the largest position of all the hedgies we watch, valued at an estimated $0.8 million in stock.. Israel Englander’s fund, Millennium Management, also sold off its stock, about $0.3 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 2 funds last quarter.

How are insiders trading Safe Bulkers, Inc. (NYSE:SB)?

Insider trading activity, especially when it’s bullish, is at its handiest when the company we’re looking at has seen transactions within the past six months. Over the last half-year time frame, Safe Bulkers, Inc. (NYSE:SB) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Safe Bulkers, Inc. (NYSE:SB). These stocks are StealthGas Inc. (NASDAQ:GASS), Global Ship Lease, Inc. (NYSE:GSL), Navios Maritime Holdings Inc. (NYSE:NM), Danaos Corporation (NYSE:DAC), and Ultrapetrol (Bahamas) Limited (NASDAQ:ULTR). All of these stocks are in the shipping industry and their market caps match SB’s market cap.

With the returns shown by the aforementioned tactics, everyday investors should always monitor hedge fund and insider trading activity, and Safe Bulkers, Inc. (NYSE:SB) shareholders fit into this picture quite nicely.

Click here to learn why you should track hedge funds