Legendary investors such as Jeffrey Talpins and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don't publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That's why we analyze the activity of those elite funds in these small-cap stocks. In the following paragraphs, we analyze GasLog Ltd (NYSE:GLOG) from the perspective of those elite funds.
GasLog Ltd (NYSE:GLOG) was in 13 hedge funds' portfolios at the end of the second quarter of 2019. GLOG has seen an increase in hedge fund sentiment of late. There were 11 hedge funds in our database with GLOG positions at the end of the previous quarter. Our calculations also showed that GLOG isn't among the 30 most popular stocks among hedge funds (see the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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.
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. We're going to view the recent hedge fund action encompassing GasLog Ltd (NYSE:GLOG).
What does smart money think about GasLog Ltd (NYSE:GLOG)?
At the end of the second quarter, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of 18% from one quarter earlier. By comparison, 8 hedge funds held shares or bullish call options in GLOG a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Renaissance Technologies has the most valuable position in GasLog Ltd (NYSE:GLOG), worth close to $18.9 million, amounting to less than 0.1%% of its total 13F portfolio. On Renaissance Technologies's heels is Royce & Associates, led by Chuck Royce, holding a $8.1 million position; 0.1% of its 13F portfolio is allocated to the stock. Other professional money managers that hold long positions comprise Steve Cohen's Point72 Asset Management, Noam Gottesman's GLG Partners and Israel Englander's Millennium Management.
As one would reasonably expect, some big names have jumped into GasLog Ltd (NYSE:GLOG) headfirst. Point72 Asset Management, managed by Steve Cohen, created the most outsized position in GasLog Ltd (NYSE:GLOG). Point72 Asset Management had $6.8 million invested in the company at the end of the quarter. Steve Cohen's Point72 Asset Management also made a $1.4 million investment in the stock during the quarter. The other funds with brand new GLOG positions are Paul Marshall and Ian Wace's Marshall Wace LLP and Bruce Kovner's Caxton Associates LP.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as GasLog Ltd (NYSE:GLOG) but similarly valued. These stocks are Perficient, Inc. (NASDAQ:PRFT), Opera Limited (NASDAQ:OPRA), Garrett Motion Inc. (NYSE:GTX), and Cryolife Inc (NYSE:CRY). All of these stocks' market caps resemble GLOG's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PRFT,16,51120,0 OPRA,6,19440,1 GTX,23,290830,4 CRY,15,47793,2 Average,15,102296,1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $102 million. That figure was $48 million in GLOG's case. Garrett Motion Inc. (NYSE:GTX) is the most popular stock in this table. On the other hand Opera Limited (NASDAQ:OPRA) is the least popular one with only 6 bullish hedge fund positions. GasLog Ltd (NYSE:GLOG) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and 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 GLOG wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); GLOG investors were disappointed as the stock returned -9.7% 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 in 2019.
Disclosure: None. This article was originally published at Insider Monkey.