Star Bulk Carriers Corp. (NASDAQ:SBLK)’s losses widened to $40.1 million, or $0.26 per share, in the first quarter of 2015 compared to a loss of $878,000 in the same year-ago quarter. Adjusted EPS was $0.20, the same as analyst estimates, on revenues of $45.5 million, significantly higher than its $20.18 million in sales in the same quarter last year, though still lower than the $47.5 million consensus. The firm’s stock went down 5.7% on Monday to close at $2.98 per share and slid by a further by 7.26% yesterday, June 30, to close at $2.94 per share. The stock has plummeted 77.3% from a year ago while over the course of the current year, the stock has tumbled 51.57%. Star Bulk Carriers Corp. (NASDAQ:SBLK) CEO Petros Pappas commented that the dry bulk shipping market experienced “a new historical low” in the first quarter which has consequently affected the firm’s financial performance. The top executive of the largest dry bulk ship owner listed in the U.S., however, highlighted his firm’s low cost of operation per vessel which he said was reduced by 7% compared to the full 2014 fiscal year.
The rather uninspired performance of the company in the first quarter of the year deviates from at least one hedge fund manager’s interest. Howard Marks of Oaktree Capital Management was the largest holder of Star Bulk Carriers shares at the end of the first quarter with a stake worth close to $298.2 million in 82.15 million shares, corresponding to 3.1% of the Oaktree’s total 13F portfolio, among the funds tracked by Insider Monkey. The fund held 51.23 million shares of the ship-owning firm at the end of the fourth quarter, during which the fund did not have any activity while the value of the stake dove to $336.10 million as the stock’s price plunged 38.7% during the third quarter of the year. Aside from the Oaktree Capital Management nod, however, investors should pay attention to a decrease in support from the world’s most elite money managers in recent months.
At Insider Monkey, we track hedge funds’ moves in order to identify actionable patterns and profit from them. Our research has shown that hedge funds’ large-cap stock picks historically delivered a monthly alpha of six basis points, though these stocks underperformed the S&P 500 Total Return Index by an average of seven basis points per month between 1999 and 2012. On the other hand, the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Index by an average of 95 basis points per month (read the details here). Since the official launch of our small-cap strategy in August 2012, it has performed just as predicted, returning over 135% and beating the market by more than 80 percentage points in 34 months. We believe the data is clear: investors will be better off by focusing on small-cap stocks utilizing hedge fund expertise rather than large-cap stocks.
We also track insider moves in companies to assess whether executives are accumulating or disposing of their own companies’ shares. For Star Bulk Carriers Corp., however, there were no recorded insider sales or purchases of shares in the first half of the year.
Keeping this in mind, we’re going to go over the recent action encompassing Star Bulk Carriers Corp.