In this article you are going to find out whether hedge funds think International Seaways, Inc. (NYSE:INSW) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It's not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Is International Seaways, Inc. (NYSE:INSW) ready to rally soon? Money managers are taking a bullish view. The number of long hedge fund bets improved by 5 recently. Our calculations also showed that INSW isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Today there are many indicators market participants have at their disposal to grade their holdings. A couple of the most useful indicators are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the best investment managers can outperform the S&P 500 by a superb amount (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. 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 the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we're going to take a gander at the key hedge fund action encompassing International Seaways, Inc. (NYSE:INSW).
How have hedgies been trading International Seaways, Inc. (NYSE:INSW)?
At Q1's end, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of 23% from the fourth quarter of 2019. On the other hand, there were a total of 11 hedge funds with a bullish position in INSW a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists an "upper tier" of noteworthy hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
Is INSW A Good Stock To Buy?
The largest stake in International Seaways, Inc. (NYSE:INSW) was held by Cyrus Capital Partners, which reported holding $95.6 million worth of stock at the end of September. It was followed by Mangrove Partners with a $18 million position. Other investors bullish on the company included Yost Capital Management, Hosking Partners, and Rubric Capital Management. In terms of the portfolio weights assigned to each position Cyrus Capital Partners allocated the biggest weight to International Seaways, Inc. (NYSE:INSW), around 35.1% of its 13F portfolio. Yost Capital Management is also relatively very bullish on the stock, setting aside 9.41 percent of its 13F equity portfolio to INSW.
As one would reasonably expect, key money managers have been driving this bullishness. Hawk Ridge Management, managed by David Brown, initiated the most valuable position in International Seaways, Inc. (NYSE:INSW). Hawk Ridge Management had $3.5 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace's Marshall Wace LLP also initiated a $3.3 million position during the quarter. The other funds with new positions in the stock are Mark Coe's Intrinsic Edge Capital, Gary Claar's Claar Advisors, and Nick Thakore's Diametric Capital.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as International Seaways, Inc. (NYSE:INSW) but similarly valued. These stocks are Talend S.A. (NASDAQ:TLND), Third Point Reinsurance Ltd (NYSE:TPRE), Novavax, Inc. (NASDAQ:NVAX), and INTL Fcstone Inc (NASDAQ:INTL). This group of stocks' market caps are closest to INSW's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TLND,29,332515,5 TPRE,17,40013,-3 NVAX,4,11335,1 INTL,10,83773,1 Average,15,116909,1 [/table]
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 $117 million. That figure was $170 million in INSW's case. Talend S.A. (NASDAQ:TLND) is the most popular stock in this table. On the other hand Novavax, Inc. (NASDAQ:NVAX) is the least popular one with only 4 bullish hedge fund positions. International Seaways, Inc. (NYSE:INSW) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. 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 8.3% in 2020 through the end of May but beat the market by 13.2 percentage points. Unfortunately INSW wasn't nearly as popular as these 10 stocks and hedge funds that were betting on INSW were disappointed as the stock returned -5.1% during the same time period 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 many of these stocks already outperformed the market so far this year.
