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Hedge Funds Are Dumping Eagle Bulk Shipping Inc. (EGLE)

Abigail Fisher
·6 min read

After several tireless days we have finished crunching the numbers from nearly 817 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Eagle Bulk Shipping Inc. (NASDAQ:EGLE).

Eagle Bulk Shipping Inc. (NASDAQ:EGLE) investors should pay attention to a decrease in support from the world's most elite money managers in recent months. Eagle Bulk Shipping Inc. (NASDAQ:EGLE) was in 3 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistics is 17. There were 7 hedge funds in our database with EGLE holdings at the end of June. Our calculations also showed that EGLE isn't among the 30 most popular stocks among hedge funds (click for Q3 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.

To the average investor there are numerous formulas stock traders use to assess publicly traded companies. A pair of the best formulas are hedge fund and insider trading indicators. We have shown that, historically, those who follow the best picks of the elite money managers can outpace the market by a solid amount (see the details here).

Fred DiSanto Ancora Advisors
Fred DiSanto Ancora Advisors

Fred DiSanto of Ancora Advisors

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website.With all of this in mind we're going to take a peek at the new hedge fund action surrounding Eagle Bulk Shipping Inc. (NASDAQ:EGLE).

What have hedge funds been doing with Eagle Bulk Shipping Inc. (NASDAQ:EGLE)?

At the end of September, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -57% from the second quarter of 2020. By comparison, 11 hedge funds held shares or bullish call options in EGLE a year ago. 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, Oaktree Capital Management was the largest shareholder of Eagle Bulk Shipping Inc. (NASDAQ:EGLE), with a stake worth $69.1 million reported as of the end of September. Trailing Oaktree Capital Management was Royce & Associates, which amassed a stake valued at $2.1 million. Ancora Advisors was 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 Oaktree Capital Management allocated the biggest weight to Eagle Bulk Shipping Inc. (NASDAQ:EGLE), around 1.51% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, setting aside 0.02 percent of its 13F equity portfolio to EGLE.

Because Eagle Bulk Shipping Inc. (NASDAQ:EGLE) has experienced bearish sentiment from the entirety of the hedge funds we track, it's safe to say that there lies a certain "tier" of hedge funds that elected to cut their entire stakes in the third quarter. At the top of the heap, Steven Tananbaum's GoldenTree Asset Management sold off the biggest position of the "upper crust" of funds followed by Insider Monkey, totaling an estimated $30.2 million in stock, and Nathaniel August's Mangrove Partners was right behind this move, as the fund said goodbye to about $0.5 million worth. These transactions are interesting, as total hedge fund interest was cut by 4 funds in the third quarter.

Let's now take a look at hedge fund activity in other stocks similar to Eagle Bulk Shipping Inc. (NASDAQ:EGLE). These stocks are Unity Biotechnology, Inc. (NASDAQ:UBX), Moneygram International Inc (NASDAQ:MGI), Tilly's Inc (NYSE:TLYS), OptiNose, Inc. (NASDAQ:OPTN), SWK Holdings Corporation (NASDAQ:SWKH), Contango Oil & Gas Company (NYSE:MCF), and Nabors Industries Ltd. (NYSE:NBR). This group of stocks' market valuations resemble EGLE's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position UBX,5,1840,-2 MGI,9,16462,1 TLYS,14,26711,-1 OPTN,11,22447,2 SWKH,3,143747,-1 MCF,3,2678,0 NBR,12,13624,-3 Average,8.1,32501,-0.6 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 8.1 hedge funds with bullish positions and the average amount invested in these stocks was $33 million. That figure was $71 million in EGLE's case. Tilly's Inc (NYSE:TLYS) is the most popular stock in this table. On the other hand SWK Holdings Corporation (NASDAQ:SWKH) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Eagle Bulk Shipping Inc. (NASDAQ:EGLE) is even less popular than SWKH. Our overall hedge fund sentiment score for EGLE is 6.3. 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. Hedge funds clearly dropped the ball on EGLE as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 28.1% in 2020 through November 23rd and still beat the market by 15.4 percentage points. A small number of hedge funds were also right about betting on EGLE as the stock returned 12.7% since Q3 (through November 23rd) and outperformed the market by an even larger margin.

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

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