With the third-quarter round of 13F filings behind us, it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was Transocean LTD (NYSE:RIG).
Is Transocean LTD (NYSE:RIG) a safe investment now? Investors who are in the know are turning bullish. The number of bullish hedge fund bets advanced by 5 in recent months. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as EQT Midstream Partners LP (NYSE:EQM), Marvell Technology Group Ltd. (NASDAQ:MRVL), and Aqua America Inc (NYSE:WTR) to gather more data points.
Follow Transocean Ltd. (NYSE:RIG)
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In the eyes of most traders, hedge funds are viewed as unimportant, outdated financial tools of yesteryear. While there are more than 8000 funds trading at present, Our researchers hone in on the bigwigs of this club, about 700 funds. It is estimated that this group of investors orchestrates the majority of all hedge funds’ total asset base, and by keeping track of their first-class picks, Insider Monkey has unsheathed a number of investment strategies that have historically outperformed the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points per year for a decade in their back tests.
Keeping this in mind, let’s take a gander at the latest action regarding Transocean LTD (NYSE:RIG).
How are hedge funds trading Transocean LTD (NYSE:RIG)?
At the end of the third quarter, a total of 37 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 16% from the second quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Icahn Capital LP, managed by Carl Icahn, holds the most valuable position in Transocean LTD (NYSE:RIG). Icahn Capital LP has a $277.5 million position in the stock, comprising 1% of its 13F portfolio. Coming in second is Robert Pitts of Steadfast Capital Management, with n $112.6 million position; the fund has 2.3% of its 13F portfolio invested in the stock. Other professional money managers that are bullish encompass Ken Griffin’s Citadel Investment Group, and Jonathan Barrett and Paul Segal’s Luminus Management.
With a general bullishness amongst the heavyweights, key money managers have jumped into Transocean LTD (NYSE:RIG) headfirst. Luminus Management established the biggest position in Transocean LTD (NYSE:RIG). Luminus Management had $18.4 million invested in the company at the end of the quarter. Don Morgan’s Brigade Capital also initiated a $15.4 million position during the quarter. The other funds with new positions in the stock are Todd J. Kantor’s Encompass Capital Advisors, Mark Weissman, Adam Cohen and David Coleto’s Caspian Capital Partners, and Colin Hall and James Davidson’s Long Oar Global Investors.
Let’s now review hedge fund activity in other stocks similar to Transocean LTD (NYSE:RIG). We will take a look at EQT Midstream Partners LP (NYSE:EQM), Marvell Technology Group Ltd. (NASDAQ:MRVL), Aqua America Inc (NYSE:WTR), and Dunkin Brands Group Inc (NASDAQ:DNKN). This group of stocks’ market values matches Transocean LTD (NYSE:RIG)’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EQM | 13 | 73139 | 1 |
| MRVL | 31 | 373271 | -5 |
| WTR | 11 | 95586 | 1 |
| DNKN | 22 | 319181 | 7 |
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 $215 million. That figure was $612 million in Transocean LTD (NYSE:RIG)’s case. Marvell Technology Group Ltd. (NASDAQ:MRVL) is the most popular stock in this table. On the other hand, Aqua America Inc (NYSE:WTR) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks, Transocean LTD (NYSE:RIG) 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.
