Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of FTS International, Inc. (NYSE:FTSI) based on that data.
FTS International, Inc. (NYSE:FTSI) was in 9 hedge funds’ portfolios at the end of March. FTSI shareholders have witnessed a decrease in activity from the world’s largest hedge funds of late. There were 14 hedge funds in our database with FTSI holdings at the end of the previous quarter. Our calculations also showed that FTSI 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.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 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 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to view the recent hedge fund action encompassing FTS International, Inc. (NYSE:FTSI).
Hedge fund activity in FTS International, Inc. (NYSE:FTSI)
Heading into the second quarter of 2020, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -36% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in FTSI over the last 18 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
Among these funds, Glendon Capital Management held the most valuable stake in FTS International, Inc. (NYSE:FTSI), which was worth $0.1 million at the end of the third quarter. On the second spot was D E Shaw which amassed $0.1 million worth of shares. Winton Capital Management, Arrowstreet Capital, and Citadel Investment Group 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 Glendon Capital Management allocated the biggest weight to FTS International, Inc. (NYSE:FTSI), around 0.02% of its 13F portfolio. BlueCrest Capital Mgmt. is also relatively very bullish on the stock, setting aside 0.0012 percent of its 13F equity portfolio to FTSI.
Since FTS International, Inc. (NYSE:FTSI) has witnessed a decline in interest from the entirety of the hedge funds we track, we can see that there were a few hedgies that decided to sell off their positions entirely last quarter. Intriguingly, Till Bechtolsheimer’s Arosa Capital Management dumped the largest stake of the 750 funds followed by Insider Monkey, worth an estimated $0.4 million in stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund dropped about $0.2 million worth. These moves are interesting, as aggregate hedge fund interest fell by 5 funds last quarter.
Let’s check out hedge fund activity in other stocks similar to FTS International, Inc. (NYSE:FTSI). These stocks are TransAct Technologies Incorporated (NASDAQ:TACT), Data I/O Corporation (NASDAQ:DAIO), Bellicum Pharmaceuticals Inc (NASDAQ:BLCM), and Sotherly Hotels Inc (NASDAQ:SOHO). This group of stocks’ market valuations resemble FTSI’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.5 hedge funds with bullish positions and the average amount invested in these stocks was $2 million. That figure was $0 million in FTSI’s case. Bellicum Pharmaceuticals Inc (NASDAQ:BLCM) is the most popular stock in this table. On the other hand Data I/O Corporation (NASDAQ:DAIO) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks FTS International, Inc. (NYSE:FTSI) 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 13.4% in 2020 through June 22nd but still managed to beat the market by 15.9 percentage points. Hedge funds were also right about betting on FTSI as the stock returned 80.5% so far in Q2 (through June 22nd) 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.
Disclosure: None. This article was originally published at Insider Monkey.