Hedge funds and other investment firms that we track manage billions of dollars of their wealthy clients’ money, and needless to say, they are painstakingly thorough when analyzing where to invest this money, as their own wealth depends on it. Regardless of the various methods used by elite investors like David Tepper and Dan Loeb, the resources they expend are second-to-none. This is especially valuable when it comes to small-cap stocks, which is where they generate their strongest outperformance, as their resources give them a huge edge when it comes to studying these stocks compared to the average investor, which is why we intently follow their activity in the small-cap space.
Hornbeck Offshore Services, Inc. (NYSE:HOS) has seen an increase in hedge fund interest lately. HOS was in 23 hedge funds’ portfolios at the end of the third quarter of 2015. There were 20 hedge funds in our database with HOS holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Lydall, Inc. (NYSE:LDL), Straight Path Communications Inc (NYSEMKT:STRP), and Callon Petroleum Company (NYSE:CPE) to gather more data points.
To the average investor there are numerous gauges investors have at their disposal to evaluate their stock investments. A duo of the most useful gauges are hedge fund and insider trading interest. We have shown that, historically, those who follow the best picks of the elite money managers can outpace their index-focused peers by a solid margin (see the details here).
Keeping this in mind, we’re going to check out the new action regarding Hornbeck Offshore Services, Inc. (NYSE:HOS).
What does the smart money think about Hornbeck Offshore Services, Inc. (NYSE:HOS)?
At the end of the third quarter, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of 15% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Fine Capital Partners, managed by Debra Fine, holds the most valuable position in Hornbeck Offshore Services, Inc. (NYSE:HOS). Fine Capital Partners has a $48.1 million position in the stock, comprising 4.7% of its 13F portfolio. The second most bullish fund manager is BHR Capital, led by Michael Thompson, holding a $37 million position; the fund has 5.4% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism encompass Robert Polak’s Anchor Bolt Capital, William C. Martin’s Raging Capital Management and Gilchrist Berg’s Water Street Capital.
As one would reasonably expect, some big names have been driving this bullishness. Millennium Management, managed by Israel Englander, initiated the largest position in Hornbeck Offshore Services, Inc. (NYSE:HOS). Millennium Management had $6.6 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $1.2 million position during the quarter. The other funds with new positions in the stock are Michael Platt and William Reeves’s BlueCrest Capital Mgmt., Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Matthew Tewksbury’s Stevens Capital Management.
Let’s go over hedge fund activity in other stocks similar to Hornbeck Offshore Services, Inc. (NYSE:HOS). These stocks are Lydall, Inc. (NYSE:LDL), Straight Path Communications Inc (NYSEMKT:STRP), Callon Petroleum Company (NYSE:CPE), and E Commerce China Dangdang Inc (ADR) (NYSE:DANG). All of these stocks’ market caps match HOS’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $40 million. That figure was $199 million in HOS’s case. Callon Petroleum Company (NYSE:CPE) is the most popular stock in this table with 15 funds holding shares. On the other hand E Commerce China Dangdang Inc (ADR) (NYSE:DANG) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Hornbeck Offshore Services, Inc. (NYSE:HOS) 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.