Mega fund managers such as Wellington, Fidelity, Vanguard, T Rowe Price and Goldman, with average assets under management of almost a quarter of trillion dollars, are bullish on the Shipping group, adding a net $107 million in the June quarter to their $3.2 billion prior quarter position in the group. Overall, they are still under-weight in the group by a factor of 2.4. That is, taken together, the 30+ mega funds have invested 0.06% of their assets in the group, significantly less than the 0.15% weighting of the group in the overall market.
A majority of the hedge fund and mutual fund managers included in this group manage well over $100 billion in U.S. equity assets, with some managing between $50 and $100 billion. The list includes prominent managers such as Wellington Management ($1.6 trillion in total assets under management), Vanguard Group ($1.4 trillion), Fidelity Investments ($640 billion), T Rowe Price ($330 billion), and Goldman Sachs Asset Management ($580 billion), among others. The following are the Shipping stocks that these mega fund managers are most bullish and bearish about (see Table):
Mega Funds Bullish on Teekay Corporation (TK): TK provides international crude oil and petroleum product transportation services with a current fleet of 150 vessels. Eighteen mega funds together hold $415 million or over 20% of the company. Mega funds Neuberger Berman Group ($159 million), J P Morgan Chase & Co. ($99 million) and Franklin Street Advisors ($52 million) are the major holders of TK stock.
Mega Funds Bullish on Nordic American Tanker Ltd. (NAT): NAT provides crude oil transportation services through bareboat, time, and spot charters with a current fleet of 19 vessels. Seventeen mega funds together hold $137 million, adding a net $54 million during the June quarter. The funds that added major positions in the June quarter include Wellington Capital Management ($49 million) and Morgan Stanley ($10 million).
Mega Funds Bullish on Overseas Shipbuilding Group (OSG): OSG is a provider of shipping transportation services for crude oil and petroleum bulk products with a fleet of 106 vessels. Twenty-two mega funds together hold $186 million of OSG stock, or almost a third of the company. Franklin Street Advisors ($46 million), Vanguard Group ($23 million), Wellington Capital Management ($17 million), State Street Corp. ($16 million) and Fidelity Investments ($15 million) are mega funds that have a major position in OSG.
Mega Funds Bullish on Kirby Corp. (KEX): KEX is engaged in inland and offshore marine transportation, and the overhaul and repair of diesel engines and related parts. At $640 million, cumulatively this is the largest position for mega funds in the shipping group, accounting for almost a quarter of the shares. Vanguard Group ($126 million), T Rowe Price ($99 million), State Street Corp. ($77 million), Wellington Capital Management ($74 million) and Barclays Global Investors ($71 million) are the mega funds with the largest position in KEX.
Mega Funds Bearish on Dryships Inc. (DRYS): DRYS is a Greek provider of carrier transportation services with a fleet of 38 dry-bulk carriers and 12 tankers. Mega funds are under-invested in DRYS as together they hold only $117 million or just under ten percent of the company, after cutting a net $4 million in the June quarter. Deutsche Bank AG ($62 million) and Ameriprise Financial ($20 million) are the mega funds that have the largest position in DRYS stock.
Mega Funds Bearish on Golar LNG Ltd. (GLNG): GLNG provides international marine transportation services for liquefied natural gas with a fleet of 12 vessels. Mega funds are under-invested in GLNG as together they hold only $94 million or just under four percent of the company, after cutting a net $4 million in the June quarter. State Street Corp. ($21 million), Northern Trust Corp. ($16 million) and Barclays Global Investors ($12 million) are the mega funds that have the largest position in GLNG stock.
Mega Funds Bullish on Frontline Ltd. (FRO): FRO provides tanker transportation services of oil and oil products through a fleet of 73 vessels. Fifteen mega funds together hold $73 million or almost thirteen percent of the company, including adding a net $10 million during the June quarter. Wellington Capital Management ($16 million), Barclays Global Investors ($13 million) and Bank of New York Mellon Corp. ($10 million) are the mega funds that have the largest position in FRO stock.
Mega Funds Bearish on Oceanfreight Inc. (OCNF), Knightsbridge Tankers (VLCCF), and Seanergy Maritime Holdings (SHIP): OCNF is engaged in operating a fleet of 12 second-hand vessels for marine transportation, VLCCF is an international tanker company whose primary business activity is international seaborne transportation of crude oil, and SHIP is engaged in the transportation of dry bulk cargoes through the ownership and operation of 20 dry bulk carriers. Mega funds are bearish as they have limited or no holding in all three of these relatively larger shipping companies.
Furthermore, mega funds by virtue of holding large positions, as illustrated in the following table, are bullish on Teekay Offshore Partners (TOO), a provider of marine transportation services from offshore oil fields to onshore terminals and refineries; Alexander & Baldwin (ALEX), a provider of ocean transportation services in Hawaii, Guam, China and the U.S. Pacific coast ports with 17 vessels; and Teekay LNG Partners (TGP), a provider of international marine transportation services for LNG and crude oil with a 30 vessel fleet.
General Methodology and Background Information: The latest available institutional 13-F filings of over 30+ mega hedge fund and mutual fund managers were analyzed to determine their capital allocation among different industry groupings, and to determine their favorite picks and pans in each group. These mega fund managers number less than one percent of all funds and yet they control almost half of the U.S. equity discretionary fund assets. The argument is that mega institutional investors have the resources and the access to information, knowledge and expertise to conduct extensive due diligence in informing their investment decisions. When mega Institutional Investors invest and maybe even converge on a specific investment idea, the idea deserves consideration for further investigation. The savvy investor may then leverage this information either as a starting point to conduct his own due diligence.
Credit: Historical fundamentals including operating metrics and stock ownership information were derived using SEC filings data, I-Metrix® by Edgar Online®, Zacks Investment Research, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.
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