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Hedge Fund Sentiment Is Stagnant On Dorian LPG Ltd (LPG)

After several tireless days we have finished crunching the numbers from the more than 700 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Dorian LPG Ltd (NYSE:LPG).

Dorian LPG Ltd (NYSE:LPG) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 6 hedge funds’ portfolios at the end of September. At the end of this article we will also compare LPG to other stocks including Sierra Bancorp (NASDAQ:BSRR), Aquantia Corp. (NYSE:AQ), and Triple-S Management Corp.(NYSE:GTS) to get a better sense of its popularity.

If you’d ask most investors, hedge funds are seen as slow, outdated investment tools of yesteryear. While there are greater than 8,000 funds trading today, Our researchers look at the moguls of this club, around 700 funds. It is estimated that this group of investors manage the lion’s share of the hedge fund industry’s total asset base, and by keeping track of their inimitable stock picks, Insider Monkey has formulated many investment strategies that have historically outstripped the broader indices. Insider Monkey’s flagship hedge fund strategy outstripped the S&P 500 index by 6 percentage points per year since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 24% since February 2017 (through December 3rd) even though the market was up nearly 23% during the same period. We just shared a list of 11 short targets in our latest quarterly update.

D. E. Shaw

Let’s check out the key hedge fund action surrounding Dorian LPG Ltd (NYSE:LPG).

Hedge fund activity in Dorian LPG Ltd (NYSE:LPG)

Heading into the fourth quarter of 2018, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, no change from one quarter earlier. By comparison, 11 hedge funds held shares or bullish call options in LPG heading into this year. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

No of Hedge Funds with LPG Positions

Among these funds, Kensico Capital held the most valuable stake in Dorian LPG Ltd (NYSE:LPG), which was worth $63.9 million at the end of the third quarter. On the second spot was Royce & Associates which amassed $18.6 million worth of shares. Moreover, Dalton Investments, GLG Partners, and D E Shaw were also bullish on Dorian LPG Ltd (NYSE:LPG), allocating a large percentage of their portfolios to this stock.

Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.

Let’s check out hedge fund activity in other stocks similar to Dorian LPG Ltd (NYSE:LPG). These stocks are Sierra Bancorp (NASDAQ:BSRR), Aquantia Corp. (NYSE:AQ), Triple-S Management Corp.(NYSE:GTS), and Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI). This group of stocks’ market values are similar to LPG’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BSRR 7 18338 0
AQ 5 17151 -1
GTS 13 74515 0
ACBI 17 89049 2
Average 10.5 49763 0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $50 million. That figure was $87 million in LPG’s case. Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI) is the most popular stock in this table. On the other hand Aquantia Corp. (NYSE:AQ) is the least popular one with only 5 bullish hedge fund positions. Dorian LPG Ltd (NYSE:LPG) 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. In this regard ACBI might be a better candidate to consider a long position.

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

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