Is SilverBow Resorces, Inc. (NYSE:SBOW) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is SilverBow Resorces (SBOW) a good stock to buy now? SBOW has seen a decrease in support from the world’s most elite money managers lately. SilverBow Resorces, Inc. (NYSE:SBOW) was in 6 hedge funds’ portfolios at the end of September. The all time high for this statistics is 11. There were 7 hedge funds in our database with SBOW holdings at the end of June. Our calculations also showed that SBOW 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.
If you’d ask most market participants, hedge funds are assumed to be slow, old financial vehicles of the past. While there are over 8000 funds in operation at present, We hone in on the aristocrats of this club, around 850 funds. These money managers manage the majority of all hedge funds’ total asset base, and by monitoring their highest performing equity investments, Insider Monkey has come up with various investment strategies that have historically defeated 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 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
Peter Algert of Algert Global
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. Keeping this in mind we’re going to take a look at the fresh hedge fund action regarding SilverBow Resorces, Inc. (NYSE:SBOW).
What have hedge funds been doing with SilverBow Resorces, Inc. (NYSE:SBOW)?
At Q3’s end, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of -14% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards SBOW over the last 21 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Strategic Value Partners was the largest shareholder of SilverBow Resorces, Inc. (NYSE:SBOW), with a stake worth $17.6 million reported as of the end of September. Trailing Strategic Value Partners was Pentwater Capital Management, which amassed a stake valued at $1.2 million. Millennium Management, Marshall Wace LLP, and Algert Coldiron Investors 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 Strategic Value Partners allocated the biggest weight to SilverBow Resorces, Inc. (NYSE:SBOW), around 14.17% of its 13F portfolio. Algert Coldiron Investors is also relatively very bullish on the stock, designating 0.03 percent of its 13F equity portfolio to SBOW.
Due to the fact that SilverBow Resorces, Inc. (NYSE:SBOW) has experienced bearish sentiment from the smart money, it’s safe to say that there is a sect of fund managers that decided to sell off their entire stakes heading into Q4. Intriguingly, Donald Sussman’s Paloma Partners said goodbye to the biggest investment of the 750 funds tracked by Insider Monkey, valued at close to $0.1 million in stock, and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital was right behind this move, as the fund dumped about $0 million worth. These transactions are interesting, as total hedge fund interest fell by 1 funds heading into Q4.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as SilverBow Resorces, Inc. (NYSE:SBOW) but similarly valued. We will take a look at SCYNEXIS Inc (NASDAQ:SCYX), TESSCO Technologies, Inc. (NASDAQ:TESS), SEACOR Marine Holdings Inc. (NYSE:SMHI), RealNetworks Inc (NASDAQ:RNWK), SRAX, Inc. (NASDAQ:SRAX), The LGL Group, Inc. (NYSE:LGL), and CBM Bancorp, Inc. (NASDAQ:CBMB). This group of stocks’ market valuations are similar to SBOW’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SCYX | 3 | 2731 | -4 |
| TESS | 3 | 3818 | -4 |
| SMHI | 2 | 1341 | -2 |
| RNWK | 4 | 6790 | -1 |
| SRAX | 2 | 159 | 1 |
| LGL | 4 | 7816 | -1 |
| CBMB | 3 | 1015 | 0 |
| Average | 3 | 3381 | -1.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 3 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $19 million in SBOW’s case. RealNetworks Inc (NASDAQ:RNWK) is the most popular stock in this table. On the other hand SEACOR Marine Holdings Inc. (NYSE:SMHI) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks SilverBow Resorces, Inc. (NYSE:SBOW) is more popular among hedge funds. Our overall hedge fund sentiment score for SBOW is 70.4. 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. 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 returned 30.7% in 2020 through November 27th but still managed to beat the market by 16.1 percentage points. Hedge funds were also right about betting on SBOW as the stock returned 57.3% since the end of September (through 11/27) 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.
Follow Silverbow Resources Inc. (NYSE:SBOW)
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Disclosure: None. This article was originally published at Insider Monkey.
