Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
Is Tidewater Inc. (NYSE:TDW) going to take off soon? The best stock pickers are really in a pessimistic mood. The number of bullish hedge fund bets experienced a decline of 3 recently. There were 7 hedge funds in our database with TDW holdings at the end of the 2016 third quarter. At the end of this article we will also compare TDW to other stocks including Lifevantage Corporation (NASDAQ:LFVN), Noodles & Co (NASDAQ:NDLS), and Navios Maritime Holdings Inc. (NYSE:NM) to get a better sense of its popularity.
Follow Tidewater Inc (NYSE:TDW)
Follow Tidewater Inc (NYSE:TDW)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Keeping this in mind, let’s take a look at the recent action encompassing Tidewater Inc. (NYSE:TDW).
What have hedge funds been doing with Tidewater Inc. (NYSE:TDW)?
At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a decline of 30% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards TDW over the last 5 quarters. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Citadel Investment Group, led by Ken Griffin, holds the biggest position in Tidewater Inc. (NYSE:TDW). According to regulatory filings, the fund has a $4.5 million position in the stock, comprising less than 0.1% of its 13F portfolio. The second largest stake is held by Renaissance Technologies, one of the biggest hedge funds in the world, which manages a $4 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors that are bullish consist of Douglas Dethy’s DC Capital Partners, Joshua Packwood and Schuster Tanger’s Radix Partners and Glenn Greenberg’s Brave Warrior Capital. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Since Tidewater Inc. (NYSE:TDW) has sustained falling interest from the smart money, it’s easy to see that there was a specific group of hedge funds who were dropping their entire stakes by the end of the third quarter. It’s worth mentioning that Israel Englander’s Millennium Management cashed in the biggest position of the 700 funds monitored by Insider Monkey, valued at close to $3 million in stock. D. E. Shaw’s fund, D E Shaw, also said goodbye to its stock, about $0.5 million worth of TDW shares.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Tidewater Inc. (NYSE:TDW) but similarly valued. These stocks are Lifevantage Corporation (NASDAQ:LFVN), Noodles & Co (NASDAQ:NDLS), Navios Maritime Holdings Inc. (NYSE:NM), and Eagle Bulk Shipping Inc. (NASDAQ:EGLE). This group of stocks’ market caps match TDW’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LFVN | 6 | 12033 | -1 |
| NDLS | 6 | 5484 | 2 |
| NM | 5 | 6707 | -3 |
| EGLE | 4 | 11694 | 0 |
As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $9 million. That figure was $10 million in TDW’s case. Lifevantage Corporation (NASDAQ:LFVN) is the most popular stock in this table. On the other hand Eagle Bulk Shipping Inc. (NASDAQ:EGLE) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Tidewater Inc. (NYSE:TDW) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: none.
