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 Tsakos Energy Navigation Limited (NYSE:TNP).
Is Tsakos Energy Navigation Limited (NYSE:TNP) a buy here? Prominent investors are betting on the stock. The number of long hedge fund positions moved up by 1 in recent months. Our calculations also showed that TNP 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In the eyes of most shareholders, hedge funds are seen as unimportant, outdated investment tools of yesteryear. While there are greater than 8000 funds trading at the moment, Our researchers choose to focus on the bigwigs of this group, approximately 750 funds. It is estimated that this group of investors command bulk of the hedge fund industry's total asset base, and by tailing their finest investments, Insider Monkey has uncovered numerous investment strategies that have historically surpassed the market. Insider Monkey's flagship short hedge fund strategy outperformed 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_746893" align="aligncenter" width="473"] Paul Marshall of Marshall Wace[/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. We're going to take a gander at the new hedge fund action encompassing Tsakos Energy Navigation Limited (NYSE:TNP).
What have hedge funds been doing with Tsakos Energy Navigation Limited (NYSE:TNP)?
At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a change of 17% from the second quarter of 2019. On the other hand, there were a total of 6 hedge funds with a bullish position in TNP a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
More specifically, Kopernik Global Investors was the largest shareholder of Tsakos Energy Navigation Limited (NYSE:TNP), with a stake worth $16.5 million reported as of the end of September. Trailing Kopernik Global Investors was Renaissance Technologies, which amassed a stake valued at $8.5 million. Arrowstreet Capital, Marshall Wace, and Millennium Management were 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 Kopernik Global Investors allocated the biggest weight to Tsakos Energy Navigation Limited (NYSE:TNP), around 3.13% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, earmarking 0.01 percent of its 13F equity portfolio to TNP.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Two Sigma Advisors, managed by John Overdeck and David Siegel, established the most outsized position in Tsakos Energy Navigation Limited (NYSE:TNP). Two Sigma Advisors had $0.1 million invested in the company at the end of the quarter.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Tsakos Energy Navigation Limited (NYSE:TNP) but similarly valued. We will take a look at ADMA Biologics Inc (NASDAQ:ADMA), Bluerock Residential Growth REIT Inc (NYSE:BRG), Jumei International Holding Limited (NYSE:JMEI), and ChannelAdvisor Corporation (NYSE:ECOM). This group of stocks' market caps resemble TNP's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ADMA,11,105915,1 BRG,13,26088,2 JMEI,3,8671,-3 ECOM,13,46926,-1 Average,10,46900,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $47 million. That figure was $27 million in TNP's case. Bluerock Residential Growth REIT Inc (NYSE:BRG) is the most popular stock in this table. On the other hand Jumei International Holding Limited (NYSE:JMEI) is the least popular one with only 3 bullish hedge fund positions. Tsakos Energy Navigation Limited (NYSE:TNP) is not the least popular stock in this group but hedge fund interest is still below average. 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. A small number of hedge funds were also right about betting on TNP as the stock returned 20.3% during the first two months of Q4 and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.