Concerns over a shift in Fed’s easy monetary policy have hit several hedge funds hard during the third quarter. A number of sectors are in correction territory. More importantly, Russell 2000 ETF (IWM) underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points between June 25, 2015 and October 30, 2015. Hedge funds and institutional investors tracked by Insider Monkey usually invest a disproportionate amount of their portfolios in smaller cap stocks. We have been receiving indications that hedge funds were paring back their overall exposure and this is one of the factors behind the recent movements in major indices. In this article, we will take a closer look at hedge fund sentiment towards GULF COAST ULTRA DEEP RTY TR (OTCMKTS:GULTU).
GULF COAST ULTRA DEEP RTY TR (OTCMKTS:GULTU)’s stock lost 77% in the first nine months of 2015, which spooked the large investors and among the funds we track, the number of funds bullish on the stock declined by four during the third quarter. GULTU was in 14 hedge funds’ portfolios at the end of September. At the end of this article we will also compare GULTU to other stocks, including Ballantyne Strong Inc (NYSEMKT:BTN), OncoGenex Pharmaceuticals Inc (NASDAQ:OGXI), and Verastem Inc (NASDAQ:VSTM) to get a better sense of its popularity.
According to most stock holders, hedge funds are viewed as unimportant, outdated investment vehicles of years past. While there are over 8000 funds trading at the moment, Our experts hone in on the moguls of this group, about 700 funds. These money managers control the majority of all hedge funds’ total asset base, and by keeping an eye on their highest performing equity investments, Insider Monkey has come up with a number of investment strategies that have historically surpassed the market. Insider Monkey’s small-cap hedge fund strategy defeated 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 review the latest action surrounding GULF COAST ULTRA DEEP RTY TR (OTCMKTS:GULTU).
How are hedge funds trading GULF COAST ULTRA DEEP RTY TR (OTCMKTS:GULTU)?
At the end of September, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, down by 22% on the quarter. Despite the decrease, several funds still held substantial positions in the company heading into the fourth quarter. More specifically, Mark McGoldrick and Jason Maynard’s Mount Kellett Capital Management has the biggest position in GULF COAST ULTRA DEEP RTY TR (OTCMKTS:GULTU), worth close to $9 million, comprising 8.8% of its total 13F portfolio. Sitting at the No. 2 spot is Omega Advisors, led by Leon Cooperman, holding a $6.9 million position; 0.1% of its 13F portfolio is allocated to the stock. The remaining peers that are bullish contain Michael Kao’s Akanthos Capital, Farallon Capital, and Robert Emil Zoellner’s Alpine Associates.