Is Superior Energy Services, Inc. (NYSE:SPN) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Superior Energy Services, Inc. (NYSE:SPN) was in 20 hedge funds' portfolios at the end of December. SPN investors should be aware of an increase in activity from the world's largest hedge funds of late. There were 17 hedge funds in our database with SPN holdings at the end of the previous quarter. Our calculations also showed that SPN isn't among the 30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We're going to go over the new hedge fund action regarding Superior Energy Services, Inc. (NYSE:SPN).
How have hedgies been trading Superior Energy Services, Inc. (NYSE:SPN)?
Heading into the first quarter of 2019, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 18% from the second quarter of 2018. On the other hand, there were a total of 24 hedge funds with a bullish position in SPN a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, AQR Capital Management was the largest shareholder of Superior Energy Services, Inc. (NYSE:SPN), with a stake worth $19.4 million reported as of the end of December. Trailing AQR Capital Management was Fine Capital Partners, which amassed a stake valued at $15.3 million. D E Shaw, Pzena Investment Management, and Citadel Investment Group were also very fond of the stock, giving the stock large weights in their portfolios.
With a general bullishness amongst the heavyweights, some big names were leading the bulls' herd. Arosa Capital Management, managed by Till Bechtolsheimer, assembled the largest position in Superior Energy Services, Inc. (NYSE:SPN). Arosa Capital Management had $3.4 million invested in the company at the end of the quarter. Paul Tudor Jones's Tudor Investment Corp also made a $0.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Andrew Feldstein and Stephen Siderow's Blue Mountain Capital, Jeffrey Talpins's Element Capital Management, and Benjamin A. Smith's Laurion Capital Management.
Let's now take a look at hedge fund activity in other stocks similar to Superior Energy Services, Inc. (NYSE:SPN). We will take a look at Barnes & Noble, Inc. (NYSE:BKS), Calix Inc (NYSE:CALX), Veritex Holdings Inc (NASDAQ:VBTX), and HarborOne Bancorp, Inc. (NASDAQ:HONE). This group of stocks' market values are closest to SPN's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BKS,17,34164,1 CALX,14,119940,2 VBTX,8,51816,-9 HONE,4,6758,-2 Average,10.75,53170,-2 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $53 million. That figure was $80 million in SPN's case. Barnes & Noble, Inc. (NYSE:BKS) is the most popular stock in this table. On the other hand HarborOne Bancorp, Inc. (NASDAQ:HONE) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Superior Energy Services, Inc. (NYSE:SPN) is more popular among hedge funds. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Hedge funds were also right about betting on SPN as the stock returned 49% and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.