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Hedge Funds Are Dumping International Seaways, Inc. (INSW)

The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought International Seaways, Inc. (NYSE:INSW) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.

International Seaways, Inc. (NYSE:INSW) investors should pay attention to a decrease in support from the world’s most elite money managers recently. International Seaways, Inc. (NYSE:INSW) was in 19 hedge funds’ portfolios at the end of June. The all time high for this statistics is 27. There were 27 hedge funds in our database with INSW positions at the end of the first quarter. Our calculations also showed that INSW isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

In the financial world there are a large number of metrics investors employ to analyze stocks. Some of the most under-the-radar metrics are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the best fund managers can beat their index-focused peers by a significant margin (see the details here).

David Siegel of Two Sigma Advisors

David Siegel of Two Sigma Advisors

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we are checking out this junior gold mining stock and we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website to get excerpts of these letters in your inbox. With all of this in mind let’s take a peek at the latest hedge fund action surrounding International Seaways, Inc. (NYSE:INSW).

How have hedgies been trading International Seaways, Inc. (NYSE:INSW)?

At Q2’s end, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -30% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in INSW over the last 20 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in International Seaways, Inc. (NYSE:INSW) was held by Cyrus Capital Partners, which reported holding $65.4 million worth of stock at the end of September. It was followed by Hosking Partners with a $5.4 million position. Other investors bullish on the company included Two Sigma Advisors, Marshall Wace LLP, and Winton Capital Management. In terms of the portfolio weights assigned to each position Cyrus Capital Partners allocated the biggest weight to International Seaways, Inc. (NYSE:INSW), around 22.47% of its 13F portfolio. Claar Advisors is also relatively very bullish on the stock, earmarking 0.32 percent of its 13F equity portfolio to INSW.

Because International Seaways, Inc. (NYSE:INSW) has experienced a decline in interest from the aggregate hedge fund industry, it’s easy to see that there lies a certain “tier” of hedgies who were dropping their positions entirely last quarter. At the top of the heap, Nathaniel August’s Mangrove Partners sold off the biggest investment of all the hedgies tracked by Insider Monkey, worth an estimated $18 million in stock, and Carson Yost’s Yost Capital Management was right behind this move, as the fund said goodbye to about $10 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 8 funds last quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as International Seaways, Inc. (NYSE:INSW) but similarly valued. We will take a look at Univest Financial Corporation (NASDAQ:UVSP), Marine Products Corp. (NYSE:MPX), Diebold Nixdorf Incorporated (NYSE:DBD), Avadel Pharmaceuticals plc (NASDAQ:AVDL), Voyager Therapeutics, Inc. (NASDAQ:VYGR), Tristate Capital Holdings Inc (NASDAQ:TSC), and Horizon Bancorp, Inc. (NASDAQ:HBNC). This group of stocks’ market caps match INSW’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
UVSP 12 54827 1
MPX 5 14864 -1
DBD 16 96061 -1
AVDL 23 174995 7
VYGR 14 59419 -1
TSC 17 49693 1
HBNC 14 22051 3
Average 14.4 67416 1.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 14.4 hedge funds with bullish positions and the average amount invested in these stocks was $67 million. That figure was $84 million in INSW’s case. Avadel Pharmaceuticals plc (NASDAQ:AVDL) is the most popular stock in this table. On the other hand Marine Products Corp. (NYSE:MPX) is the least popular one with only 5 bullish hedge fund positions. International Seaways, Inc. (NYSE:INSW) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for INSW is 57. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 24.8% in 2020 through the end of September and beat the market by 19.3 percentage points. Unfortunately INSW wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on INSW were disappointed as the stock returned -10.2% in Q3 and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.

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