Is EURN A Good Stock To Buy Now?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 817 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 September 30th, about a month before the elections. In this article we look at what those investors think of Euronav NV (NYSE:EURN).

Is EURN a good stock to buy now? Prominent investors were in a pessimistic mood. The number of long hedge fund bets were cut by 6 in recent months. Euronav NV (NYSE:EURN) was in 11 hedge funds’ portfolios at the end of September. The all time high for this statistics is 33. Our calculations also showed that EURN isn’t among the 30 most popular stocks among hedge funds (click for Q3 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.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Crispin Odey of Odey Asset Management Group

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 recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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. Now we’re going to go over the fresh hedge fund action surrounding Euronav NV (NYSE:EURN).

Do Hedge Funds Think EURN Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2020, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -35% from the previous quarter. On the other hand, there were a total of 18 hedge funds with a bullish position in EURN a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, Crispin Odey’s Odey Asset Management Group has the largest position in Euronav NV (NYSE:EURN), worth close to $20.1 million, accounting for 2.7% of its total 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, with a $16.2 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other professional money managers that are bullish encompass Daniel Gold’s QVT Financial, Anand Parekh’s Alyeska Investment Group and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. In terms of the portfolio weights assigned to each position Odey Asset Management Group allocated the biggest weight to Euronav NV (NYSE:EURN), around 2.72% of its 13F portfolio. QVT Financial is also relatively very bullish on the stock, designating 1.69 percent of its 13F equity portfolio to EURN.

Seeing as Euronav NV (NYSE:EURN) has faced bearish sentiment from the aggregate hedge fund industry, logic holds that there were a few hedge funds that elected to cut their full holdings by the end of the third quarter. Interestingly, Lee Ainslie’s Maverick Capital dumped the biggest stake of all the hedgies monitored by Insider Monkey, comprising close to $1.5 million in stock. D. E. Shaw’s fund, D E Shaw, also cut its stock, about $1.1 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 6 funds by the end of the third quarter.

Let’s now review hedge fund activity in other stocks similar to Euronav NV (NYSE:EURN). We will take a look at Barnes Group Inc. (NYSE:B), Enable Midstream Partners LP (NYSE:ENBL), Callaway Golf Company (NYSE:ELY), Studio City International Holdings Limited (NYSE:MSC), Four Corners Property Trust, Inc. (NYSE:FCPT), Coeur Mining, Inc. (NYSE:CDE), and Jack in the Box Inc. (NASDAQ:JACK). All of these stocks’ market caps are similar to EURN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
B 13 37329 -6
ENBL 4 8820 -1
ELY 32 390873 8
MSC 3 277757 0
FCPT 13 67476 -6
CDE 15 44740 1
JACK 38 314788 7
Average 16.9 163112 0.4

View table here if you experience formatting issues.

As you can see these stocks had an average of 16.9 hedge funds with bullish positions and the average amount invested in these stocks was $163 million. That figure was $68 million in EURN’s case. Jack in the Box Inc. (NASDAQ:JACK) is the most popular stock in this table. On the other hand Studio City International Holdings Limited (NYSE:MSC) is the least popular one with only 3 bullish hedge fund positions. Euronav NV (NYSE:EURN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for EURN is 20.4. 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 negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and surpassed the market again by 16.2 percentage points. Unfortunately EURN wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); EURN investors were disappointed as the stock returned -6.7% since the end of September (through 12/8) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

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