Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
Is Superior Energy Services, Inc. (NYSE:SPN) a buy, sell, or hold? The best stock pickers are actually actually turning less bullish. The number of bullish hedge fund positions went down by 2 lately. SPN was in 25 hedge funds’ portfolios at the end of September. There were 27 hedge funds in our database with SPN positions at the end of the previous quarter. At the end of this article we will also compare SPN to other stocks including InterDigital, Inc. (NASDAQ:IDCC), Graham Holdings Co (NYSE:GHC), and LaSalle Hotel Properties (NYSE:LHO) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
How have hedgies been trading Superior Energy Services, Inc. (NYSE:SPN)?
At the end of the third quarter, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a drop of 7% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in SPN over the last 5 quarters. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Pzena Investment Management, led by Richard S. Pzena, holds the number one position in Superior Energy Services, Inc. (NYSE:SPN). Pzena Investment Management has a $71.9 million position in the stock. The second most bullish fund manager is Jim Simons’ Renaissance Technologies holding a $62.2 million position. Some other professional money managers that hold long positions consist of Cliff Asness’ AQR Capital Management, T Boone Pickens’ BP Capital and Israel Englander’s Millennium Management. We should note that BP Capital is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that sold off their entire stakes in the stock during the third quarter. Interestingly, Vince Maddi and Shawn Brennan’s SIR Capital Management sold off the largest stake of the “upper crust” of funds followed by Insider Monkey, worth about $12.6 million in stock, and Kenneth Tropin’s Graham Capital Management was right behind this move, as the fund cut about $7.8 million worth of shares.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Superior Energy Services, Inc. (NYSE:SPN) but similarly valued. We will take a look at InterDigital, Inc. (NASDAQ:IDCC), Graham Holdings Co (NYSE:GHC), LaSalle Hotel Properties (NYSE:LHO), and Oceaneering International (NYSE:OII). All of these stocks’ market caps are similar to SPN’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $261 million. That figure was $235 million in SPN’s case. InterDigital, Inc. (NASDAQ:IDCC) is the most popular stock in this table. On the other hand LaSalle Hotel Properties (NYSE:LHO) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Superior Energy Services, Inc. (NYSE:SPN) 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.