Hedge Funds Losing Hope for GulfMark Offshore, Inc. (GLF)

Out of thousands of stocks that are currently traded on the market, it is difficult to determine those that can really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of over 700 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about GulfMark Offshore, Inc. (NYSE:GLF).

Is GulfMark Offshore, Inc. (NYSE:GLF) a buy right now? Money managers are in a bearish mood. The number of bullish hedge fund positions fell by 3 in the third quarter, while the value of their holdings declined by over 45%. GLF was in 9 hedge funds’ portfolios at the end of the third quarter of 2015, with those investors holding 22.40% of the company’s shares. There were 12 hedge funds in our database with GLF holdings at the end of the second quarter. At the end of this article we will also compare GLF to other stocks including ROI Acquisition Corp (NASDAQ:ROIQ), Salem Media Corp (NASDAQ:SALM), and Xcel Brands Inc (NASDAQ:XELB) to get a better sense of its popularity.

To the average investor there are a large number of tools shareholders can use to grade stocks. Two of the less known tools are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the top money managers can outperform the broader indices by a solid margin (see the details here).

Keeping this in mind, we’re going to view the recent action regarding GulfMark Offshore, Inc. (NYSE:GLF).

How are hedge funds trading GulfMark Offshore, Inc. (NYSE:GLF)?

At the end of the third quarter, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 25% fall from the second quarter. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their stakes considerably (or had already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, William C. Martin’s Raging Capital Management has the number one position in GulfMark Offshore, Inc. (NYSE:GLF), worth close to $29.4 million, amounting to 3.9% of its total 13F portfolio. The second-largest stake is held by Ken Griffin of Citadel Investment Group, with a $2.3 million position; less than 0.1% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that hold long positions comprise Renaissance Technologies, and Israel Englander’s Millennium Management.

Because GulfMark Offshore, Inc. (NYSE:GLF) has experienced declining sentiment from the smart money, it’s safe to say that there were a few hedgies that elected to cut their positions entirely heading into Q4. It’s worth mentioning that Michael Price’s MFP Investors dropped the largest stake of the “upper crust” of funds watched by Insider Monkey, totaling about $6.4 million in stock, while Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital was right behind this move, as the fund sold off about $0.9 million worth of GLF shares. These moves are intriguing to say the least, as total hedge fund interest dropped by 3 funds heading into Q4.

Let’s now take a look at hedge fund activity in other stocks similar to GulfMark Offshore, Inc. (NYSE:GLF). These stocks are ROI Acquisition Corp (NASDAQ:ROIQ), Salem Media Corp (NASDAQ:SALM), Xcel Brands Inc (NASDAQ:XELB), and Emergent Capital Inc (NYSE:EMG). This group of stocks’ market values are closest to GLF’s market value.

As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $32 million. That figure was $35 million in GLF’s case. ROI Acquisition Corp (NASDAQ:ROIQ) is the most popular stock in this table. On the other hand Xcel Brands Inc (NASDAQ:XELB) is the least popular one with only 4 bullish hedge fund positions. GulfMark Offshore, Inc. (NYSE:GLF) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ROIQ might be a better candidate to consider a long position in.