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Is Seacor Holdings, Inc. (CKH) Going to Burn These Hedge Funds?: Ship Finance International Limited (SFL), Seaspan Corporation (SSW)

Seacor Holdings, Inc. (NYSE:CKH) was in 15 hedge funds’ portfolio at the end of the fourth quarter of 2012. CKH has seen a decrease in enthusiasm from smart money in recent months. There were 17 hedge funds in our database with CKH positions at the end of the previous quarter.

Seacor Holdings, Inc. (NYSE:CKH)

In the eyes of most market participants, hedge funds are viewed as slow, outdated investment tools of the past. While there are more than 8000 funds trading at the moment, we hone in on the masters of this group, around 450 funds. Most estimates calculate that this group controls the majority of all hedge funds’ total asset base, and by paying attention to their best stock picks, we have figured out a number of investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 25 percentage points in 6.5 month (see the details here).

Equally as important, positive insider trading sentiment is another way to parse down the investments you’re interested in. As the old adage goes: there are a variety of reasons for an executive to cut shares of his or her company, but just one, very simple reason why they would behave bullishly. Many academic studies have demonstrated the valuable potential of this tactic if “monkeys” know what to do (learn more here).

With these “truths” under our belt, we’re going to take a look at the key action regarding Seacor Holdings, Inc. (NYSE:CKH).

Hedge fund activity in Seacor Holdings, Inc. (NYSE:CKH)

In preparation for this year, a total of 15 of the hedge funds we track were bullish in this stock, a change of -12% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were increasing their holdings meaningfully.

When looking at the hedgies we track, Chuck Royce’s Royce & Associates had the largest position in Seacor Holdings, Inc. (NYSE:CKH), worth close to $104 million, comprising 0.3% of its total 13F portfolio. On Royce & Associates’s heels is Kensico Capital, managed by Michael Lowenstein, which held a $72 million position; the fund has 2.2% of its 13F portfolio invested in the stock. Some other hedgies that are bullish include Charles de Vaulx’s International Value Advisers, Martin Whitman’s Third Avenue Management and Cliff Asness’s AQR Capital Management.

Judging by the fact that Seacor Holdings, Inc. (NYSE:CKH) has experienced falling interest from the aggregate hedge fund industry, it’s safe to say that there exists a select few fund managers who were dropping their full holdings heading into 2013. Intriguingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital cut the largest stake of the “upper crust” of funds we track, totaling close to $3 million in stock., and Ben Levine, Andrew Manuel and Stefan Renold of LMR Partners was right behind this move, as the fund dumped about $0 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 2 funds heading into 2013.

What have insiders been doing with Seacor Holdings, Inc. (NYSE:CKH)?

Insider purchases made by high-level executives is particularly usable when the company we’re looking at has experienced transactions within the past 180 days. Over the latest half-year time frame, Seacor Holdings, Inc. (NYSE:CKH) has experienced zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Seacor Holdings, Inc. (NYSE:CKH). These stocks are Ship Finance International Limited (NYSE:SFL), Seaspan Corporation (NYSE:SSW), Costamare Inc (NYSE:CMRE), Golar LNG Partners LP (NASDAQ:GMLP), and Scorpio Tankers Inc. (NYSE:STNG). All of these stocks are in the shipping industry and their market caps match CKH’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Ship Finance International Limited (NYSE:SFL) 4 0 0
Seaspan Corporation (NYSE:SSW) 5 0 0
Costamare Inc (NYSE:CMRE) 6 0 0
Golar LNG Partners LP (NASDAQ:GMLP) 6 0 0
Scorpio Tankers Inc. (NYSE:STNG) 12 0 0

With the results exhibited by our studies, everyday investors must always monitor hedge fund and insider trading activity, and Seacor Holdings, Inc. (NYSE:CKH) applies perfectly to this mantra.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

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