Is Genco Shipping & Trading Limited (GNK) A Good Stock To Buy?

Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those elite funds in these small-cap stocks. In the following paragraphs, we analyze Genco Shipping & Trading Limited (NYSE:GNK) from the perspective of those elite funds.

Is Genco Shipping & Trading Limited (NYSE:GNK) a buy here? The best stock pickers are betting on the stock. The number of bullish hedge fund positions stands at 10 as of late. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Peoples Utah Bancorp (NASDAQ:PUB), Permian Basin Royalty Trust (NYSE:PBT), and NextPoint Residential Trust Inc (NYSE:NXRT) to gather more data points.

Follow Genco Shipping & Trading Ltd (NYSE:GNK)

To the average investor there are dozens of gauges market participants use to appraise stocks. A pair of the best gauges are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the top hedge fund managers can trounce the S&P 500 by a very impressive margin (see the details here).

Now, we’re going to check out the recent action encompassing Genco Shipping & Trading Limited (NYSE:GNK).

How are hedge funds trading Genco Shipping & Trading Limited (NYSE:GNK)?

Genco’s stock started trading on the NYSE in July and managed to capture the attention of some big investors. According to Insider Monkey’s hedge fund database, Mark T. Gallogly’s Centerbridge Partners has the largest position in Genco Shipping & Trading Limited (NYSE:GNK), worth close to $89 million, comprising 5.2% of its total 13F portfolio. Coming in second is Jeffrey Bersh and Michael Wartell of Venor Capital Management, with an $5.2 million position; 2% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors that are bullish encompass Geoffrey Raynor’s Q Investments (Specter Holdings), George Soros’s Soros Fund Management and Chuck Royce’s Royce & Associates.

Let’s now review hedge fund activity in other stocks similar to Genco Shipping & Trading Limited (NYSE:GNK). We will take a look at Peoples Utah Bancorp (NASDAQ:PUB), Permian Basin Royalty Trust (NYSE:PBT), NextPoint Residential Trust Inc (NYSE:NXRT), and Legacy Reserves LP (NASDAQ:LGCY). This group of stocks’ market valuations resemble GNK’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PUB 6 11313 -3
PBT 5 16026 -2
NXRT 7 36265 0
LGCY 4 9262 1

As you can see these stocks had an average of 5.5 hedge funds with bullish positions and the average amount invested in these stocks was $18 million. That figure was $106 million in GNK’s case. NextPoint Residential Trust Inc (NYSE:NXRT) is the most popular stock in this table. On the other hand Legacy Reserves LP (NASDAQ:LGCY) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Genco Shipping & Trading Limited (NYSE:GNK) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.