Here is What Hedge Funds Think About Overseas Shipholding Group, Inc. Class A (OSG)

We have been waiting for this for a year and finally the third quarter ended up showing a nice bump in the performance of small-cap stocks. Both the S&P 500 and Russell 2000 were up since the end of the second quarter, but small-cap stocks outperformed the large-cap stocks by double digits. This is important for hedge funds, which are big supporters of small-cap stocks, because their investors started pulling some of their capital out due to poor recent performance. It is very likely that equity hedge funds will deliver better risk adjusted returns in the second half of this year. In this article we are going to look at how this recent market trend affected the sentiment of hedge funds towards Overseas Shipholding Group, Inc. Class A (NYSE:OSG) , and what that likely means for the prospects of the company and its stock.

Overseas Shipholding Group, Inc. Class A (NYSE:OSG) was in 20 hedge funds’ portfolios at the end of September. OSG investors should pay attention to an increase in hedge fund interest recently. There were 15 hedge funds in our database with OSG positions at the end of the previous quarter. At the end of this article we will also compare OSG to other stocks including ZIOPHARM Oncology Inc. (NASDAQ:ZIOP), PBF Logistics LP (NYSE:PBFX), and General Cable Corporation (NYSE:BGC) to get a better sense of its popularity.

We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.

Now, we’re going to take a gander at the key action encompassing Overseas Shipholding Group, Inc. Class A (NYSE:OSG).

Hedge fund activity in Overseas Shipholding Group, Inc. Class A (NYSE:OSG)

At the end of the third quarter, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a boost of 33% from the previous quarter. On the other hand, there were a total of 10 hedge funds with a bullish position in OSG at the beginning of this year. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Randall Smith’s Alden Global Capital has the largest position in Overseas Shipholding Group, Inc. Class A (NYSE:OSG), worth close to $26.7 million, amounting to 27% of its total 13F portfolio. The second most bullish fund manager is Jon Bauer of Contrarian Capital, with a $21.2 million position; 10.1% of its 13F portfolio is allocated to the stock. Some other peers that hold long positions include Mark Weissman, Adam Cohen and David Coleto’s Caspian Capital Partners, Michael Thompson’s BHR Capital and Ken Griffin’s Citadel Investment Group. 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.

With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Caxton Associates LP, led by Bruce Kovner, assembled the largest position in Overseas Shipholding Group, Inc. Class A (NYSE:OSG). According to regulatory filings, the fund had $13.8 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also initiated a $0.9 million position during the quarter. The following funds were also among the new OSG investors: Cliff Asness’s AQR Capital Management, Jeffrey Bronchick’s Cove Street Capital, and Glenn Russell Dubin’s Highbridge Capital Management.

Let’s now review hedge fund activity in other stocks similar to Overseas Shipholding Group, Inc. Class A (NYSE:OSG). We will take a look at ZIOPHARM Oncology Inc. (NASDAQ:ZIOP), PBF Logistics LP (NYSE:PBFX), General Cable Corporation (NYSE:BGC), and Chatham Lodging Trust (NYSE:CLDT). This group of stocks’ market valuations match OSG’s market valuation.

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 $52 million. That figure was $121 million in OSG’s case. General Cable Corporation (NYSE:BGC) is the most popular stock in this table. On the other hand PBF Logistics LP (NYSE:PBFX) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Overseas Shipholding Group, Inc. Class A (NYSE:OSG) 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.