Does Seaspan Corporation (NYSE:SSW) represent a good buying opportunity at the moment? Let’s quickly check the hedge fund interest towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on satellite photos and other research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail inconceivably on some occasions, but net net their stock picks have been generating superior risk-adjusted returns on average over the years.
Is Seaspan Corporation (NYSE:SSW) the right pick for your portfolio? Prominent investors are becoming more confident. The number of long hedge fund bets rose by 5 recently. Our calculations also showed that SSW isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). SSW was in 12 hedge funds’ portfolios at the end of the third quarter of 2019. There were 7 hedge funds in our database with SSW positions at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. 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 even check out this option genius’ weekly trade ideas. This December we recommended Adams Energy based on an under-the-radar fund manager’s investor letter and the stock gained 20 percent. We’re going to take a look at the key hedge fund action regarding Seaspan Corporation (NYSE:SSW).
How are hedge funds trading Seaspan Corporation (NYSE:SSW)?
At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 71% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in SSW over the last 17 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Seaspan Corporation (NYSE:SSW) was held by Fairfax Financial Holdings, which reported holding $819.4 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $20.5 million position. Other investors bullish on the company included Miller Value Partners, ExodusPoint Capital, and PEAK6 Capital Management. In terms of the portfolio weights assigned to each position Fairfax Financial Holdings allocated the biggest weight to Seaspan Corporation (NYSE:SSW), around 37.82% of its 13F portfolio. Miller Value Partners is also relatively very bullish on the stock, earmarking 0.27 percent of its 13F equity portfolio to SSW.
With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. ExodusPoint Capital, managed by Michael Gelband, assembled the biggest position in Seaspan Corporation (NYSE:SSW). ExodusPoint Capital had $4.3 million invested in the company at the end of the quarter. Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners also made a $0.8 million investment in the stock during the quarter. The other funds with brand new SSW positions are David E. Shaw’s D E Shaw, Paul Marshall and Ian Wace’s Marshall Wace, and Ken Griffin’s Citadel Investment Group.
Let’s check out hedge fund activity in other stocks similar to Seaspan Corporation (NYSE:SSW). We will take a look at ExlService Holdings, Inc. (NASDAQ:EXLS), Tenet Healthcare Corporation (NYSE:THC), Kinsale Capital Group, Inc. (NASDAQ:KNSL), and Verra Mobility Corporation (NASDAQ:VRRM). All of these stocks’ market caps match SSW’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.25 hedge funds with bullish positions and the average amount invested in these stocks was $247 million. That figure was $855 million in SSW’s case. Tenet Healthcare Corporation (NYSE:THC) is the most popular stock in this table. On the other hand Kinsale Capital Group, Inc. (NASDAQ:KNSL) is the least popular one with only 11 bullish hedge fund positions. Seaspan Corporation (NYSE:SSW) is not the least popular stock in this group but hedge fund interest is still below average. 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. A small number of hedge funds were also right about betting on SSW as the stock returned 11.8% during the first two months of Q4 and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.