Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 750 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Helix Energy Solutions Group Inc. (NYSE:HLX).
Helix Energy Solutions Group Inc. (NYSE:HLX) was in 13 hedge funds' portfolios at the end of the third quarter of 2019. HLX shareholders have witnessed an increase in hedge fund interest in recent months. There were 11 hedge funds in our database with HLX holdings at the end of the previous quarter. Our calculations also showed that HLX isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most investors, hedge funds are assumed to be underperforming, outdated financial vehicles of the past. While there are greater than 8000 funds trading at the moment, We look at the upper echelon of this group, around 750 funds. Most estimates calculate that this group of people shepherd bulk of all hedge funds' total capital, and by keeping track of their unrivaled stock picks, Insider Monkey has come up with a number of investment strategies that have historically exceeded the market. Insider Monkey's flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points a year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
[caption id="attachment_258236" align="alignnone" width="600"] Ken Griffin of Citadel Investment Group[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds' buy/sell signals. Let's go over the new hedge fund action encompassing Helix Energy Solutions Group Inc. (NYSE:HLX).
How are hedge funds trading Helix Energy Solutions Group Inc. (NYSE:HLX)?
At the end of the third quarter, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 18% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards HLX over the last 17 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Ken Griffin's Citadel Investment Group has the number one position in Helix Energy Solutions Group Inc. (NYSE:HLX), worth close to $27.9 million, amounting to less than 0.1%% of its total 13F portfolio. On Citadel Investment Group's heels is Millennium Management, led by Israel Englander, holding a $23.6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other peers that hold long positions encompass Dmitry Balyasny's Balyasny Asset Management, Renaissance Technologies and David E. Shaw's D E Shaw. In terms of the portfolio weights assigned to each position GeoSphere Capital Management allocated the biggest weight to Helix Energy Solutions Group Inc. (NYSE:HLX), around 6.39% of its 13F portfolio. Quantinno Capital is also relatively very bullish on the stock, dishing out 0.18 percent of its 13F equity portfolio to HLX.
Now, key money managers have jumped into Helix Energy Solutions Group Inc. (NYSE:HLX) headfirst. Renaissance Technologies, created the most outsized position in Helix Energy Solutions Group Inc. (NYSE:HLX). Renaissance Technologies had $3.5 million invested in the company at the end of the quarter. Peter Muller's PDT Partners also initiated a $1 million position during the quarter. The other funds with brand new HLX positions are Arvind Sanger's GeoSphere Capital Management and Gavin Saitowitz and Cisco J. del Valle's Springbok Capital.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Helix Energy Solutions Group Inc. (NYSE:HLX) but similarly valued. We will take a look at Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY), The Children's Place Inc. (NASDAQ:PLCE), GMS Inc. (NYSE:GMS), and Higher One Holdings, Inc (NYSE:ONE). All of these stocks' market caps are similar to HLX's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PLAY,18,278866,-3 PLCE,20,247278,1 GMS,23,130082,3 ONE,8,54613,1 Average,17.25,177710,0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.25 hedge funds with bullish positions and the average amount invested in these stocks was $178 million. That figure was $70 million in HLX's case. GMS Inc. (NYSE:GMS) is the most popular stock in this table. On the other hand Higher One Holdings, Inc (NYSE:ONE) is the least popular one with only 8 bullish hedge fund positions. Helix Energy Solutions Group Inc. (NYSE:HLX) 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 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately HLX wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); HLX investors were disappointed as the stock returned 3% during the first two months of the fourth 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 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.