Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards StealthGas Inc. (NASDAQ:GASS) changed recently.
StealthGas Inc. (NASDAQ:GASS) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 6 hedge funds’ portfolios at the end of March. Our calculations also showed that GASS isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). 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 Limbach Holdings, Inc. (NASDAQ:LMB), Aprea Therapeutics, Inc. (NASDAQ:APRE), and Randolph Bancorp, Inc. (NASDAQ:RNDB) to gather more data points.
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Chuck Royce of Royce & Associates
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $24 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to take a peek at the recent hedge fund action surrounding StealthGas Inc. (NASDAQ:GASS).
Do Hedge Funds Think GASS Is A Good Stock To Buy Now?
At first quarter’s end, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in GASS over the last 23 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Glendon Capital Management was the largest shareholder of StealthGas Inc. (NASDAQ:GASS), with a stake worth $18.5 million reported as of the end of March. Trailing Glendon Capital Management was MSDC Management, which amassed a stake valued at $10 million. Redwood Capital Management, Renaissance Technologies, and Royce & Associates were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Glendon Capital Management allocated the biggest weight to StealthGas Inc. (NASDAQ:GASS), around 1.93% of its 13F portfolio. Gratia Capital is also relatively very bullish on the stock, designating 0.84 percent of its 13F equity portfolio to GASS.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Millennium Management. 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 Gratia Capital).
Let’s now review hedge fund activity in other stocks similar to StealthGas Inc. (NASDAQ:GASS). We will take a look at Limbach Holdings, Inc. (NASDAQ:LMB), Aprea Therapeutics, Inc. (NASDAQ:APRE), Randolph Bancorp, Inc. (NASDAQ:RNDB), Elevate Credit, Inc. (NYSE:ELVT), GTT Communications Inc (NYSE:GTT), Akerna Corp. (NASDAQ:KERN), and Capricor Therapeutics, Inc. (NASDAQ:CAPR). This group of stocks’ market values are similar to GASS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LMB | 9 | 15208 | 2 |
| APRE | 3 | 5334 | -3 |
| RNDB | 1 | 598 | 0 |
| ELVT | 8 | 10203 | -3 |
| GTT | 7 | 30666 | -2 |
| KERN | 7 | 7562 | 2 |
| CAPR | 3 | 1586 | 1 |
| Average | 5.4 | 10165 | -0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.4 hedge funds with bullish positions and the average amount invested in these stocks was $10 million. That figure was $43 million in GASS’s case. Limbach Holdings, Inc. (NASDAQ:LMB) is the most popular stock in this table. On the other hand Randolph Bancorp, Inc. (NASDAQ:RNDB) is the least popular one with only 1 bullish hedge fund positions. StealthGas Inc. (NASDAQ:GASS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GASS is 56.3. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 19.3% in 2021 through June 25th and beat the market again by 4.8 percentage points. Unfortunately GASS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on GASS were disappointed as the stock returned -1.4% since the end of March (through 6/25) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
