Is Seanergy Maritime Holdings Corp. (SHIP) Going to Burn These Hedge Funds?

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 Seanergy Maritime Holdings Corp. (NASDAQ:SHIP) based on that data.

Seanergy Maritime Holdings Corp. (NASDAQ:SHIP) was in 3 hedge funds’ portfolios at the end of March. SHIP has seen an increase in hedge fund sentiment of late. There were 2 hedge funds in our database with SHIP positions at the end of the previous quarter. Our calculations also showed that SHIP 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.

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 44 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.


Jim Simons Founder of Renaissance Technologies

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. 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 S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to take a gander at the new hedge fund action encompassing Seanergy Maritime Holdings Corp. (NASDAQ:SHIP).

Hedge fund activity in Seanergy Maritime Holdings Corp. (NASDAQ:SHIP)

Heading into the second quarter of 2020, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 50% from the fourth quarter of 2019. By comparison, 0 hedge funds held shares or bullish call options in SHIP a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Seanergy Maritime Holdings Corp. (NASDAQ:SHIP) was held by Sabby Capital, which reported holding $0 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $0 million position. The only other hedge fund that is bullish on the company was Millennium Management.

With a general bullishness amongst the heavyweights, specific money managers have jumped into Seanergy Maritime Holdings Corp. (NASDAQ:SHIP) headfirst. Millennium Management, managed by Israel Englander, assembled the most outsized position in Seanergy Maritime Holdings Corp. (NASDAQ:SHIP). Millennium Management had $0 million invested in the company at the end of the quarter.

Let’s check out hedge fund activity in other stocks similar to Seanergy Maritime Holdings Corp. (NASDAQ:SHIP). We will take a look at Wheeler Real Estate Investment Trust, Inc. (NASDAQ:WHLRP), NTN Buzztime Inc (NYSE:NTN), Summer Infant, Inc. (NASDAQ:SUMR), and SAExploration Holdings, Inc. (NASDAQ:SAEX). This group of stocks’ market caps are similar to SHIP’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
WHLRP 2 3739 0
NTN 1 94 -1
SUMR 2 1672 0
SAEX 5 783 -2
Average 2.5 1572 -0.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 2.5 hedge funds with bullish positions and the average amount invested in these stocks was $2 million. That figure was $0 million in SHIP’s case. SAExploration Holdings, Inc. (NASDAQ:SAEX) is the most popular stock in this table. On the other hand NTN Buzztime Inc (NYSE:NTN) is the least popular one with only 1 bullish hedge fund positions. Seanergy Maritime Holdings Corp. (NASDAQ:SHIP) 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. 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 gained 7.9% in 2020 through May 22nd but beat the market by 15.6 percentage points. Unfortunately SHIP wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on SHIP were disappointed as the stock returned -6.7% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.

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