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Did Hedge Funds Drop The Ball On Star Bulk Carriers Corp. (SBLK) ?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31 holdings, data that is available nowhere else. Should you consider Star Bulk Carriers Corp. (NASDAQ:SBLK) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Star Bulk Carriers Corp. (NASDAQ:SBLK) shareholders have witnessed a decrease in hedge fund sentiment recently. Our calculations also showed that SBLK isn’t among the 30 most popular stocks among hedge funds.

According to most shareholders, hedge funds are viewed as worthless, outdated financial tools of years past. While there are greater than 8000 funds in operation at the moment, Our researchers hone in on the moguls of this club, approximately 750 funds. These money managers oversee the majority of the hedge fund industry’s total asset base, and by paying attention to their matchless stock picks, Insider Monkey has identified many investment strategies that have historically outrun the market. Insider Monkey’s flagship hedge fund strategy outstripped the S&P 500 index by around 5 percentage points a year since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).

Howard Marks OAKTREE CAPITAL MANAGEMENT

Let’s take a look at the new hedge fund action encompassing Star Bulk Carriers Corp. (NASDAQ:SBLK).

How have hedgies been trading Star Bulk Carriers Corp. (NASDAQ:SBLK)?

Heading into the second quarter of 2019, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -21% from the fourth quarter of 2018. By comparison, 13 hedge funds held shares or bullish call options in SBLK a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

SBLK_jun2019

Among these funds, Oaktree Capital Management held the most valuable stake in Star Bulk Carriers Corp. (NASDAQ:SBLK), which was worth $232.8 million at the end of the first quarter. On the second spot was Impala Asset Management which amassed $23.9 million worth of shares. Moreover, York Capital Management, Renaissance Technologies, and Marshall Wace LLP were also bullish on Star Bulk Carriers Corp. (NASDAQ:SBLK), allocating a large percentage of their portfolios to this stock.

Since Star Bulk Carriers Corp. (NASDAQ:SBLK) has experienced declining sentiment from the aggregate hedge fund industry, it’s safe to say that there exists a select few hedgies that decided to sell off their full holdings heading into Q3. Interestingly, Charles Lemonides’s Valueworks LLC dumped the biggest position of the “upper crust” of funds watched by Insider Monkey, comprising close to $28.3 million in stock, and Robert Polak’s Anchor Bolt Capital was right behind this move, as the fund cut about $9.5 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 4 funds heading into Q3.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Star Bulk Carriers Corp. (NASDAQ:SBLK) but similarly valued. These stocks are Navigator Holdings Ltd (NYSE:NVGS), Quad/Graphics, Inc. (NYSE:QUAD), Peoples Bancorp Inc. (NASDAQ:PEBO), and LeMaitre Vascular Inc (NASDAQ:LMAT). This group of stocks’ market caps resemble SBLK’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
NVGS 13 280280 1
QUAD 22 39329 2
PEBO 9 29859 1
LMAT 11 17414 5
Average 13.75 91721 2.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $92 million. That figure was $306 million in SBLK’s case. Quad/Graphics, Inc. (NYSE:QUAD) is the most popular stock in this table. On the other hand Peoples Bancorp Inc. (NASDAQ:PEBO) is the least popular one with only 9 bullish hedge fund positions. Star Bulk Carriers Corp. (NASDAQ:SBLK) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Hedge funds were also right about betting on SBLK as the stock returned 31.8% during the same period and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.

Disclosure: None. This article was originally published at Insider Monkey.

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