Should You Avoid Ship Finance International Limited (SFL)?

Due to the fact that Ship Finance International Limited (NYSE:SFL) has experienced falling interest from hedge fund managers, we can see that there is a sect of fund managers that decided to sell off their full holdings in the third quarter. Intriguingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital cut the largest investment of the 700 funds monitored by Insider Monkey, totaling close to $9.2 million in stock. Ken Griffin’s fund, Citadel Investment Group, also said goodbye to its call options, about $1.4 million worth.

Let’s also examine hedge fund activity in other stocks similar to Ship Finance International Limited (NYSE:SFL). These stocks are Chesapeake Lodging Trust (NYSE:CHSP), Rambus Inc. (NASDAQ:RMBS), Actuant Corporation (NYSE:ATU), and TeleTech Holdings, Inc. (NASDAQ:TTEC). This group of stocks’ market valuations are closest to SFL’s market valuation.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $82 million. That figure was $48 million in SFL’s case. Actuant Corporation (NYSE:ATU) is the most popular stock in this table. On the other hand TeleTech Holdings, Inc. (NASDAQ:TTEC) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Ship Finance International Limited (NYSE:SFL) is even less popular than TTEC. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

Disclosure: None