Hedge Funds Cutting Their Bets On SAExploration Holdings, Inc. (SAEX)

At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards SAExploration Holdings, Inc. (NASDAQ:SAEX).

SAExploration Holdings, Inc. (NASDAQ:SAEX) was in 5 hedge funds’ portfolios at the end of the first quarter of 2020. SAEX has seen a decrease in enthusiasm from smart money recently. There were 7 hedge funds in our database with SAEX positions at the end of the previous quarter. Our calculations also showed that SAEX isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.

If you’d ask most market participants, hedge funds are assumed to be worthless, outdated financial tools of yesteryear. While there are greater than 8000 funds in operation at the moment, Our experts hone in on the aristocrats of this group, approximately 850 funds. It is estimated that this group of investors orchestrate most of the smart money’s total capital, and by following their matchless equity investments, Insider Monkey has spotted many investment strategies that have historically exceeded the market. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

Andy Redleaf Andrew Redleaf Whitebox Advisors

Andy Redleaf of Whitebox Advisors

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s analyze the key hedge fund action surrounding SAExploration Holdings, Inc. (NASDAQ:SAEX).

Hedge fund activity in SAExploration Holdings, Inc. (NASDAQ:SAEX)

At the end of the first quarter, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -29% from the previous quarter. On the other hand, there were a total of 5 hedge funds with a bullish position in SAEX a year ago. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).

Is SAEX A Good Stock To Buy?

More specifically, Highbridge Capital Management was the largest shareholder of SAExploration Holdings, Inc. (NASDAQ:SAEX), with a stake worth $0.3 million reported as of the end of September. Trailing Highbridge Capital Management was Blue Mountain Capital, which amassed a stake valued at $0.2 million. Whitebox Advisors, GLG Partners, and Minerva Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Blue Mountain Capital allocated the biggest weight to SAExploration Holdings, Inc. (NASDAQ:SAEX), around 0.42% of its 13F portfolio. Highbridge Capital Management is also relatively very bullish on the stock, earmarking 0.03 percent of its 13F equity portfolio to SAEX.

Judging by the fact that SAExploration Holdings, Inc. (NASDAQ:SAEX) has faced bearish sentiment from hedge fund managers, it’s safe to say that there exists a select few hedge funds who sold off their entire stakes last quarter. It’s worth mentioning that Ken Griffin’s Citadel Investment Group sold off the largest stake of all the hedgies monitored by Insider Monkey, totaling close to $0.2 million in stock. Renaissance Technologies, also said goodbye to its stock, about $0.1 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds last quarter.

Let’s now take a look at hedge fund activity in other stocks similar to SAExploration Holdings, Inc. (NASDAQ:SAEX). These stocks are Westwater Resources, Inc. (NASDAQ:WWR), KBS Fashion Group Limited (NASDAQ:KBSF), Medigus Ltd. (NASDAQ:MDGS), and Atlas Financial Holdings Inc (NASDAQ:AFH). All of these stocks’ market caps resemble SAEX’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
WWR 2 22 1
KBSF 1 18 1
MDGS 3 286 -1
AFH 2 340 -1
Average 2 167 0

View table here if you experience formatting issues.

As you can see these stocks had an average of 2 hedge funds with bullish positions and the average amount invested in these stocks was $0 million. That figure was $1 million in SAEX’s case. Medigus Ltd. (NASDAQ:MDGS) is the most popular stock in this table. On the other hand KBS Fashion Group Limited (NASDAQ:KBSF) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks SAExploration Holdings, Inc. (NASDAQ:SAEX) is more popular among hedge funds. 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 returned 8.3% in 2020 through the end of May but still managed to beat the market by 13.2 percentage points. Hedge funds were also right about betting on SAEX as the stock returned 56.3% so far in Q2 (through the end of May) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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