Horos Asset Management is Betting on Teekay Corp (TK) Stock

Christel Deskins

Horos Asset Management recently released its Q2 2020 Investor Letter, a copy of which you can download here. The investment firms portfolios have not been immune to this recovery, with Horos Value Internacional posting a 16.0% return in the second quarter in line with the 16.5% rise of its benchmark […]

Horos Asset Management recently released its Q2 2020 Investor Letter, a copy of which you can download here. The investment firms portfolios have not been immune to this recovery, with Horos Value Internacional posting a 16.0% return in the second quarter in line with the 16.5% rise of its benchmark index, and Horos Value Iberia returning 14.1%, above the 8.5% of its benchmark index. You should check out Horos Asset Management’s top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash.

In the said letter, Horos Asset Management highlighted a few stocks and Teekay Corp (NYSE:TK) is one of them. The investment firm said it trimmed its position in Teekay Corp (NYSE:TK) stock in Q2 2020. Teekay Corp (NYSE:TK) engages in the provision of international crude oil and gas marine transportation services. Year-to-date, Teekay Corp (NYSE:TK) stock lost 52.8% and on September 14th it had a closing price of $2.51. Here is what Horos Asset Management said:

“Teekay Corp. owns about 29% of Teekay Tankers, a tanker company. The latter’s share price has been a truly roller coaster so far in 2020. Just as an example, Teekay Tankers’ stock price fell by 50% from the beginning of the year to the lows reached in February. Then, it recovered all the losses (a 100% rise) on the back of the increase in tankers’ freight rates, caused by the strong demand for oil floating storage and the resulting decline in the supply of tankers for transportation. The company has taken the opportunity to significantly reduce its debt with the large increase in cash generation from the business in the period, and to sign contracts at fixed rates for some of its ships. Despite this, after the easing of demand for oil floating storage and the fall in freight rates, the price has returned to 52-week lows, thus giving back previous gains and having a negative impact on Teekay Corp.’s stock price.

As for our own perspective, we maintain the thesis that the market is not correctly valuing Teekay Corp. and we think that the measures that the management team has been taking in the last few months—reducing debt, improving the situation of the Floating Production Storage and Offloading vessels (FPSOs) and simplifying the capital structure—will contribute to the materialization of the investment thesis.”

Pixabay/Public Domain

In Q1 2020, the number of bullish hedge fund positions on Teekay Corp (NYSE:TK) stock decreased by about 7% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with Teekay Corp’s growth potential. Our calculations showed that Teekay Corp (NYSE:TK) isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, this “mom” trader turned $2000 into $2 million within 2 years. So, we are checking out her best trade idea of the month. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. You can subscribe to our free enewsletter below to receive our stories in your inbox:

Disclosure: None. This article is originally published at Insider Monkey.

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