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. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about Kosmos Energy Ltd (NYSE:KOS)?
Kosmos Energy Ltd (NYSE:KOS) investors should be aware of a decrease in activity from the world’s largest hedge funds in recent months. Our calculations also showed that KOS 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 investors, hedge funds are seen as underperforming, old financial tools of yesteryear. While there are greater than 8000 funds in operation at present, We look at the elite of this group, approximately 850 funds. It is estimated that this group of investors shepherd bulk of all hedge funds’ total capital, and by following their finest investments, Insider Monkey has found many investment strategies that have historically surpassed Mr. Market. Insider Monkey’s flagship short hedge fund strategy outperformed 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 .
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 trades like this one. 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. Keeping this in mind we’re going to take a glance at the new hedge fund action regarding Kosmos Energy Ltd (NYSE:KOS).
How are hedge funds trading Kosmos Energy Ltd (NYSE:KOS)?
Heading into the second quarter of 2020, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -30% from the fourth quarter of 2019. By comparison, 18 hedge funds held shares or bullish call options in KOS a year ago. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
Among these funds, AQR Capital Management held the most valuable stake in Kosmos Energy Ltd (NYSE:KOS), which was worth $11.4 million at the end of the third quarter. On the second spot was Two Sigma Advisors which amassed $4.4 million worth of shares. Winton Capital Management, Citadel Investment Group, and Millennium Management 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 Elm Ridge Capital allocated the biggest weight to Kosmos Energy Ltd (NYSE:KOS), around 1.8% of its 13F portfolio. Arosa Capital Management is also relatively very bullish on the stock, setting aside 0.14 percent of its 13F equity portfolio to KOS.
Since Kosmos Energy Ltd (NYSE:KOS) has faced bearish sentiment from hedge fund managers, logic holds that there lies a certain “tier” of hedgies who were dropping their full holdings by the end of the first quarter. It’s worth mentioning that Matt Smith’s Deep Basin Capital sold off the biggest position of all the hedgies monitored by Insider Monkey, valued at an estimated $16.3 million in stock. Peter Muller’s fund, PDT Partners, also said goodbye to its stock, about $4 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 9 funds by the end of the first quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Kosmos Energy Ltd (NYSE:KOS) but similarly valued. These stocks are Scholar Rock Holding Corporation (NASDAQ:SRRK), Replimune Group, Inc. (NASDAQ:REPL), Clearwater Paper Corp (NYSE:CLW), and American Public Education, Inc. (NASDAQ:APEI). All of these stocks’ market caps are closest to KOS’s market cap.
|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 7.75 hedge funds with bullish positions and the average amount invested in these stocks was $46 million. That figure was $28 million in KOS’s case. American Public Education, Inc. (NASDAQ:APEI) is the most popular stock in this table. On the other hand Scholar Rock Holding Corporation (NASDAQ:SRRK) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Kosmos Energy Ltd (NYSE:KOS) 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 12.2% in 2020 through June 17th but still managed to beat the market by 14.8 percentage points. Hedge funds were also right about betting on KOS as the stock returned 133.3% so far in Q2 (through June 17th) 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.