Hedge Funds Are Crazy About Global Ship Lease, Inc. (GSL)

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 Global Ship Lease, Inc. (NYSE:GSL).

Global Ship Lease, Inc. (NYSE:GSL) shareholders have witnessed an increase in support from the world’s most elite money managers of late. GSL was in 5 hedge funds’ portfolios at the end of the third quarter of 2015. There were 4 hedge funds in our database with GSL positions at the end of the previous quarter. At the end of this article we will also compare GSL to other stocks, including Agilysys, Inc. (NASDAQ:AGYS), BankFinancial Corporation (NASDAQ:BFIN), and Real Industry Inc (NASDAQ:RELY) to get a better sense of its popularity.

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According to most traders, hedge funds are viewed as worthless, outdated financial tools of yesteryear. While there are greater than an 8000 funds in operation at the moment, We choose to focus on the bigwigs of this group, around 700 funds. It is estimated that this group of investors command the lion’s share of all hedge funds’ total asset base, and by watching their first-class equity investments, Insider Monkey has come up with numerous investment strategies that have historically outpaced the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points a year for a decade in their back tests.

With all of this in mind, we’re going to check out the recent action regarding Global Ship Lease, Inc. (NYSE:GSL).

How are hedge funds trading Global Ship Lease, Inc. (NYSE:GSL)?

At the end of the third quarter, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of 25% from one quarter earlier. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Jim Simons’ Renaissance Technologies has the number one position in Global Ship Lease, Inc. (NYSE:GSL), worth close to $4.8 million, accounting for less than 0.1%% of its total 13F portfolio. On Renaissance Technologies’s heels is Potomac Capital Management, managed by Paul Solit, which holds a $1.4 million position; 1.7% of its 13F portfolio is allocated to the stock. Some other peers that are bullish include Peter Muller’s PDT Partners, Israel Englander’s Millennium Management and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Global Ship Lease, Inc. (NYSE:GSL) but similarly valued. We will take a look at Agilysys, Inc. (NASDAQ:AGYS), BankFinancial Corporation (NASDAQ:BFIN), Real Industry Inc (NASDAQ:RELY), and Hooker Furniture Corporation (NASDAQ:HOFT). This group of stocks’ market caps match GSL’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AGYS 13 141888 3
BFIN 4 34741 1
RELY 9 25280 0
HOFT 10 30130 -2

As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $58 million. That figure was just $6 million in GSL’s case. Agilysys, Inc. (NASDAQ:AGYS) is the most popular stock in this table, while BankFinancial Corporation (NASDAQ:BFIN) is the least popular one with only 4 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard AGYS might be a better candidate to consider a long position.