Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the second quarter. You can find write-ups about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves and analyze what the smart money thinks of Kosmos Energy Ltd (NYSE:KOS) based on that data.
Kosmos Energy Ltd (NYSE:KOS) shareholders have witnessed an increase in support from the world's most elite money managers lately. Our calculations also showed that KOS 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.
In the eyes of most shareholders, hedge funds are seen as underperforming, old investment vehicles of years past. While there are more than 8000 funds in operation at the moment, Our experts hone in on the masters of this club, approximately 750 funds. These hedge fund managers have their hands on bulk of all hedge funds' total capital, and by keeping an eye on their best picks, Insider Monkey has unearthed various investment strategies that have historically defeated the broader indices. Insider Monkey's flagship hedge fund strategy outrun the S&P 500 index by around 5 percentage points per year since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
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 analyze the new hedge fund action surrounding Kosmos Energy Ltd (NYSE:KOS).
How have hedgies been trading Kosmos Energy Ltd (NYSE:KOS)?
Heading into the third quarter of 2019, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards KOS over the last 16 quarters. With hedgies' sentiment swirling, there exists an "upper tier" of noteworthy hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
Among these funds, Millennium Management held the most valuable stake in Kosmos Energy Ltd (NYSE:KOS), which was worth $62.9 million at the end of the second quarter. On the second spot was Point72 Asset Management which amassed $36.3 million worth of shares. Moreover, Zimmer Partners, Citadel Investment Group, and Balyasny Asset Management were also bullish on Kosmos Energy Ltd (NYSE:KOS), allocating a large percentage of their portfolios to this stock.
Consequently, key money managers have jumped into Kosmos Energy Ltd (NYSE:KOS) headfirst. Point72 Asset Management, managed by Steve Cohen, initiated the biggest position in Kosmos Energy Ltd (NYSE:KOS). Point72 Asset Management had $36.3 million invested in the company at the end of the quarter. Stuart J. Zimmer's Zimmer Partners also initiated a $28.2 million position during the quarter. The other funds with brand new KOS positions are Matt Smith's Deep Basin Capital, D. E. Shaw's D E Shaw, and Till Bechtolsheimer's Arosa Capital Management.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Kosmos Energy Ltd (NYSE:KOS) but similarly valued. These stocks are GSX Techedu Inc. (NYSE:GSX), Emergent Biosolutions Inc (NYSE:EBS), Baozun Inc (NASDAQ:BZUN), and EVO Payments, Inc. (NASDAQ:EVOP). This group of stocks' market caps resemble KOS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GSX,2,12848,2 EBS,13,139145,2 BZUN,13,91161,-1 EVOP,13,73800,0 Average,10.25,79239,0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $79 million. That figure was $216 million in KOS's case. Emergent Biosolutions Inc (NYSE:EBS) is the most popular stock in this table. On the other hand GSX Techedu Inc. (NYSE:GSX) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Kosmos Energy Ltd (NYSE:KOS) is more popular among hedge funds. 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 KOS wasn't nearly as popular as these 20 stocks and hedge funds that were betting on KOS were disappointed as the stock returned 0.3% 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 in Q3.
Disclosure: None. This article was originally published at Insider Monkey.