U.S. Markets close in 2 hrs 36 mins

Hedge Funds Are Betting On Euronav NV (EURN)

Nina Todic

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Euronav NV (NYSE:EURN).

Is Euronav NV (NYSE:EURN) a buy right now? Investors who are in the know are becoming hopeful. The number of long hedge fund bets inched up by 5 recently. Our calculations also showed that EURN isn't among the 30 most popular stocks among hedge funds (view the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

5 Most Popular Stocks Among Hedge Funds

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Crispin Odey

Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let's review the recent hedge fund action surrounding Euronav NV (NYSE:EURN).

What does smart money think about Euronav NV (NYSE:EURN)?

At Q2's end, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 45% from the previous quarter. The graph below displays the number of hedge funds with bullish position in EURN over the last 16 quarters. With the smart money's positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their stakes significantly (or already accumulated large positions).

No of Hedge Funds with EURN Positions

More specifically, Oaktree Capital Management was the largest shareholder of Euronav NV (NYSE:EURN), with a stake worth $76.5 million reported as of the end of March. Trailing Oaktree Capital Management was QVT Financial, which amassed a stake valued at $17.3 million. Renaissance Technologies, Odey Asset Management Group, and Carlson Capital were also very fond of the stock, giving the stock large weights in their portfolios.

Consequently, specific money managers were breaking ground themselves. Odey Asset Management Group, managed by Crispin Odey, created the most valuable position in Euronav NV (NYSE:EURN). Odey Asset Management Group had $10.4 million invested in the company at the end of the quarter. David Rosen's Rubric Capital Management also made a $3.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Steve Cohen's Point72 Asset Management, Minhua Zhang's Weld Capital Management, and Michael Gelband's ExodusPoint Capital.

Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Euronav NV (NYSE:EURN) but similarly valued. We will take a look at Cubic Corporation (NYSE:CUB), Norbord Inc. (NYSE:OSB), Avanos Medical, Inc. (NYSE:AVNS), and Wageworks Inc (NYSE:WAGE). All of these stocks' market caps are similar to EURN's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CUB,19,54795,4 OSB,6,13327,-1 AVNS,11,83258,0 WAGE,21,254378,0 Average,14.25,101440,0.75 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 14.25 hedge funds with bullish positions and the average amount invested in these stocks was $101 million. That figure was $154 million in EURN's case. Wageworks Inc (NYSE:WAGE) is the most popular stock in this table. On the other hand Norbord Inc. (NYSE:OSB) is the least popular one with only 6 bullish hedge fund positions. Euronav NV (NYSE:EURN) 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 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately EURN wasn't nearly as popular as these 20 stocks and hedge funds that were betting on EURN were disappointed as the stock returned -1.9% during the third 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 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.

Disclosure: None. This article was originally published at Insider Monkey.

Related Content