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Golden Ocean Group Ltd (GOGL): Hedge Fund Sentiment Unchanged

Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 750 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Golden Ocean Group Ltd (NASDAQ:GOGL).

Hedge fund interest in Golden Ocean Group Ltd (NASDAQ:GOGL) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare GOGL to other stocks including Stock Yards Bancorp, Inc. (NASDAQ:SYBT), Lindblad Expeditions Holdings Inc (NASDAQ:LIND), and ProSight Global, Inc. (NYSE:PROS) to get a better sense of its popularity.
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

To the average investor there are tons of tools market participants put to use to evaluate publicly traded companies. A pair of the less utilized tools are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the best money managers can outpace the market by a healthy amount (see the details here).

Kerr Neilson of Platinum Asset Management

We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s view the recent hedge fund action encompassing Golden Ocean Group Ltd (NASDAQ:GOGL).

How are hedge funds trading Golden Ocean Group Ltd (NASDAQ:GOGL)?

At Q3’s end, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards GOGL over the last 17 quarters. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Kerr Neilson’s Platinum Asset Management has the most valuable position in Golden Ocean Group Ltd (NASDAQ:GOGL), worth close to $176.7 million, amounting to 4% of its total 13F portfolio. Coming in second is Renaissance Technologies, holding a $14.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish consist of Paul Marshall and Ian Wace’s Marshall Wace, Israel Englander’s Millennium Management and Michael Gelband’s ExodusPoint Capital. In terms of the portfolio weights assigned to each position Platinum Asset Management allocated the biggest weight to Golden Ocean Group Ltd (NASDAQ:GOGL), around 3.95% of its 13F portfolio. Marshall Wace is also relatively very bullish on the stock, dishing out 0.07 percent of its 13F equity portfolio to GOGL.

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Citadel Investment Group. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was ExodusPoint Capital).

Let’s also examine hedge fund activity in other stocks similar to Golden Ocean Group Ltd (NASDAQ:GOGL). These stocks are Stock Yards Bancorp, Inc. (NASDAQ:SYBT), Lindblad Expeditions Holdings Inc (NASDAQ:LIND), ProSight Global, Inc. (NYSE:PROS), and Baytex Energy Corp (NYSE:BTE). All of these stocks’ market caps are closest to GOGL’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SYBT 10 15559 4
LIND 18 167456 3
PROS 6 15728 6
BTE 9 41900 2
Average 10.75 60161 3.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $60 million. That figure was $205 million in GOGL’s case. Lindblad Expeditions Holdings Inc (NASDAQ:LIND) is the most popular stock in this table. On the other hand ProSight Global, Inc. (NYSE:PROS) is the least popular one with only 6 bullish hedge fund positions. Golden Ocean Group Ltd (NASDAQ:GOGL) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately GOGL wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); GOGL investors were disappointed as the stock returned 3.6% during the first two months of the fourth 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 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.

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

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