Were Hedge Funds Right About Costamare Inc (CMRE)?
Coronavirus is probably the #1 concern in investors' minds right now. It should be. On February 27th we published an article and predicted that a US recession is imminent. We also told you to short the market ETFs and buy long-term bonds. Investors who agreed with us and replicated these trades are up double digits whereas the market is down double digits. Our article also called for a total international travel ban to prevent the spread of the coronavirus especially from Europe. We were one step ahead of the markets and the president (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. The Insider Monkey team has completed processing the quarterly 13F filings for the December quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Costamare Inc (NYSE:CMRE).
Costamare Inc (NYSE:CMRE) investors should pay attention to an increase in activity from the world's largest hedge funds in recent months. CMRE was in 17 hedge funds' portfolios at the end of December. There were 12 hedge funds in our database with CMRE positions at the end of the previous quarter. Our calculations also showed that CMRE isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
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John Overdeck of Two Sigma Advisors[/caption]
We leave no stone unturned when looking for the next great investment idea. For example, this investor can predict short term winners following earnings announcements with 77% accuracy, so we check out his stock picks. A former hedge fund manager is pitching the "next Amazon" in this video; again we are listening. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let's take a look at the key hedge fund action surrounding Costamare Inc (NYSE:CMRE).
What does smart money think about Costamare Inc (NYSE:CMRE)?
At the end of the fourth quarter, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 42% from the third quarter of 2019. On the other hand, there were a total of 10 hedge funds with a bullish position in CMRE a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, founded by Jim Simons, holds the largest position in Costamare Inc (NYSE:CMRE). Renaissance Technologies has a $32.5 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Renaissance Technologies's heels is Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $14.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions contain Murray Stahl's Horizon Asset Management, John Overdeck and David Siegel's Two Sigma Advisors and Peter Algert and Kevin Coldiron's Algert Coldiron Investors. In terms of the portfolio weights assigned to each position Algert Coldiron Investors allocated the biggest weight to Costamare Inc (NYSE:CMRE), around 0.52% of its 13F portfolio. Navellier & Associates is also relatively very bullish on the stock, setting aside 0.24 percent of its 13F equity portfolio to CMRE.
Now, key hedge funds have been driving this bullishness. Navellier & Associates, managed by Louis Navellier, created the most outsized position in Costamare Inc (NYSE:CMRE). Navellier & Associates had $1.5 million invested in the company at the end of the quarter. Donald Sussman's Paloma Partners also made a $0.6 million investment in the stock during the quarter. The following funds were also among the new CMRE investors: D. E. Shaw's D E Shaw, Michael Gelband's ExodusPoint Capital, and Noam Gottesman's GLG Partners.
Let's go over hedge fund activity in other stocks similar to Costamare Inc (NYSE:CMRE). These stocks are NextPoint Residential Trust Inc (NYSE:NXRT), Pampa Energia S.A. (NYSE:PAM), RPC, Inc. (NYSE:RES), and GreenTree Hospitality Group Ltd. (NYSE:GHG). This group of stocks' market valuations resemble CMRE's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NXRT,16,209366,5 PAM,10,90481,0 RES,13,47446,1 GHG,8,32391,0 Average,11.75,94921,1.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.75 hedge funds with bullish positions and the average amount invested in these stocks was $95 million. That figure was $60 million in CMRE's case. NextPoint Residential Trust Inc (NYSE:NXRT) is the most popular stock in this table. On the other hand GreenTree Hospitality Group Ltd. (NYSE:GHG) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Costamare Inc (NYSE:CMRE) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 1.0% in 2020 through May 1st and still beat the market by 12.9 percentage points. Unfortunately CMRE wasn't nearly as popular as these 10 stocks and hedge funds that were betting on CMRE were disappointed as the stock returned -49.3% during the four months of 2020 (through May 1st) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
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