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Do Hedge Funds Love Global Ship Lease, Inc. (GSL)?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Global Ship Lease, Inc. (NYSE:GSL) based on that data.

Global Ship Lease, Inc. (NYSE:GSL) investors should be aware of a decrease in hedge fund interest of late. Our calculations also showed that GSL 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 today’s marketplace there are plenty of tools stock traders put to use to size up publicly traded companies. Some of the most under-the-radar tools are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the top picks of the best hedge fund managers can trounce the market by a very impressive margin (see the details here).

Jay Petschek - Corsair Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to check out the key hedge fund action regarding Global Ship Lease, Inc. (NYSE:GSL).

What does smart money think about Global Ship Lease, Inc. (NYSE:GSL)?

At Q1’s end, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -25% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards GSL over the last 18 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).

Is GSL A Good Stock To Buy?

The largest stake in Global Ship Lease, Inc. (NYSE:GSL) was held by Nokomis Capital, which reported holding $4.5 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $1.9 million position. Other investors bullish on the company included Brigade Capital, Alta Fundamental Advisers, and Corsair Capital Management. In terms of the portfolio weights assigned to each position Nokomis Capital allocated the biggest weight to Global Ship Lease, Inc. (NYSE:GSL), around 2.14% of its 13F portfolio. Alta Fundamental Advisers is also relatively very bullish on the stock, earmarking 0.93 percent of its 13F equity portfolio to GSL.

Seeing as Global Ship Lease, Inc. (NYSE:GSL) has faced falling interest from hedge fund managers, we can see that there is a sect of fund managers that slashed their entire stakes by the end of the first quarter. At the top of the heap, Bradley Louis Radoff’s Fondren Management sold off the largest investment of the “upper crust” of funds followed by Insider Monkey, valued at about $0.6 million in stock, and Matthew Halbower’s Pentwater Capital Management was right behind this move, as the fund cut about $0.2 million worth. These moves are important to note, as total hedge fund interest fell by 2 funds by the end of the first quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Global Ship Lease, Inc. (NYSE:GSL). We will take a look at Noble Corporation (NYSE:NE), EMCORE Corporation (NASDAQ:EMKR), Pluristem Therapeutics Inc. (NASDAQ:PSTI), and United-Guardian, Inc. (NASDAQ:UG). This group of stocks’ market valuations are closest to GSL’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
NE 14 17161 -4
EMKR 12 26002 0
PSTI 5 1909 3
UG 2 5998 0
Average 8.25 12768 -0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $13 million. That figure was $8 million in GSL’s case. Noble Corporation (NYSE:NE) is the most popular stock in this table. On the other hand United-Guardian, Inc. (NASDAQ:UG) is the least popular one with only 2 bullish hedge fund positions. Global Ship Lease, Inc. (NYSE:GSL) is not the least popular stock in this group but hedge fund interest is still below average. 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 13.9% in 2020 through June 10th and still beat the market by 14.2 percentage points. A small number of hedge funds were also right about betting on GSL as the stock returned 31.1% during the second quarter and outperformed the market by an even larger margin.

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