Did Hedge Funds Make The Right Call On Euronav NV (EURN) ?

The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. Now, we are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article you are going to find out whether hedge funds thoughtEuronav NV (NYSE:EURN) was a good investment heading into the second quarter and how the stock traded in comparison to the top hedge fund picks.

Euronav NV (NYSE:EURN) shareholders have witnessed an increase in hedge fund sentiment recently. EURN was in 33 hedge funds’ portfolios at the end of the first quarter of 2020. There were 28 hedge funds in our database with EURN positions at the end of the previous quarter. Our calculations also showed that EURN 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.

In the eyes of most shareholders, hedge funds are assumed to be underperforming, old financial vehicles of the past. While there are over 8000 funds with their doors open at the moment, We look at the aristocrats of this group, around 850 funds. These investment experts command most of the hedge fund industry’s total asset base, and by shadowing their finest picks, Insider Monkey has identified many investment strategies that have historically exceeded the broader indices. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

Joe Huber - Huber Capital Management

Joe Huber of Huber Capital Management

At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a glance at the new hedge fund action regarding Euronav NV (NYSE:EURN).

What does smart money think about Euronav NV (NYSE:EURN)?

At Q1’s end, a total of 33 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 18% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards EURN over the last 18 quarters. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

More specifically, Odey Asset Management Group was the largest shareholder of Euronav NV (NYSE:EURN), with a stake worth $35.9 million reported as of the end of September. Trailing Odey Asset Management Group was Marshall Wace LLP, which amassed a stake valued at $24.2 million. Huber Capital Management, Renaissance Technologies, and QVT Financial were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Odey Asset Management Group allocated the biggest weight to Euronav NV (NYSE:EURN), around 5.97% of its 13F portfolio. QVT Financial is also relatively very bullish on the stock, setting aside 4.93 percent of its 13F equity portfolio to EURN.

Consequently, some big names have jumped into Euronav NV (NYSE:EURN) headfirst. GoldenTree Asset Management, managed by Steven Tananbaum, initiated the most valuable position in Euronav NV (NYSE:EURN). GoldenTree Asset Management had $14 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also made a $13.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Todd J. Kantor’s Encompass Capital Advisors, Jeff Osher’s No Street Capital, and Louis Bacon’s Moore Global Investments.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Euronav NV (NYSE:EURN) but similarly valued. These stocks are Allogene Therapeutics, Inc. (NASDAQ:ALLO), NovaGold Resources Inc. (NYSE:NG), Corelogic Inc (NYSE:CLGX), and Brady Corp (NYSE:BRC). All of these stocks’ market caps resemble EURN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ALLO 12 101735 0
NG 19 297032 3
CLGX 31 253322 3
BRC 10 140433 -5
Average 18 198131 0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $198 million. That figure was $236 million in EURN’s case. Corelogic Inc (NYSE:CLGX) is the most popular stock in this table. On the other hand Brady Corp (NYSE:BRC) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Euronav NV (NYSE:EURN) is more popular among hedge funds. 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 12.3% in 2020 through June 30th and still beat the market by 15.5 percentage points. Unfortunately EURN wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on EURN were disappointed as the stock returned -16.7% during the second quarter 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 most of these stocks already outperformed the market in 2020.

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