Daily Archives: December 4, 2019

It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory winners by making a superficial analysis and research that leads to poor performance on aggregate. Since stock returns aren't usually symmetrically distributed and index returns are more affected by a few outlier stocks (i.e. the FAANG stocks dominating and driving S&P 500 Index's returns in recent years), more than 50% of the constituents of the Standard and Poors 500 Index underperform the benchmark. Hence, if you randomly pick a stock, there is more than 50% chance that you'd fail to beat the market. At the same time, the 20 most favored S&P 500 stocks by the hedge funds monitored by Insider Monkey generated an outperformance of more than 8 percentage points so far in 2019. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That's why we are going to go over recent hedge fund activity in KNOT Offshore Partners LP (NYSE:KNOP).

KNOT Offshore Partners LP (NYSE:KNOP) has seen a decrease in activity from the world's largest hedge funds of late. Our calculations also showed that KNOP isn't among the 30 most popular stocks among hedge funds.

To most stock holders, hedge funds are perceived as worthless, old financial vehicles of yesteryear. While there are greater than 8000 funds with their doors open at present, We choose to focus on the bigwigs of this group, around 750 funds. These money managers have their hands on the majority of the smart money's total asset base, and by keeping track of their highest performing stock picks, Insider Monkey has unsheathed a few investment strategies that have historically defeated Mr. Market. Insider Monkey's flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points per year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even thoughthe market was up more than 39% during the same period. We just shared a list of 7 short targetsin our latest quarterly update .

RENAISSANCE TECHNOLOGIES

Unlike the largest US hedge funds that areconvinced Dow will soar past 40,000 or the world's most bearish hedge fundthat'smore convinced than ever that a crash is coming,our long-short investment strategy doesn't rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds' buy/sell signals. We're going to take a look at the fresh hedge fund action encompassing KNOT Offshore Partners LP (NYSE:KNOP).

At the end of the third quarter, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -40% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in KNOP over the last 17 quarters. With the smart money's sentiment swirling, there exists an "upper tier" of notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).

No of Hedge Funds with KNOP Positions

Story continues

Among these funds, Renaissance Technologies held the most valuable stake in KNOT Offshore Partners LP (NYSE:KNOP), which was worth $13.3 million at the end of the third quarter. On the second spot was Arrowstreet Capital which amassed $6.8 million worth of shares. McKinley Capital Management was also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position McKinley Capital Management allocated the biggest weight to KNOT Offshore Partners LP (NYSE:KNOP), around 0.08% of its portfolio. Arrowstreet Capital is also relatively very bullish on the stock, earmarking 0.02 percent of its 13F equity portfolio to KNOP.

Since KNOT Offshore Partners LP (NYSE:KNOP) has faced bearish sentiment from hedge fund managers, logic holds that there lies a certain "tier" of funds who sold off their positions entirely heading into Q4. It's worth mentioning that Ken Griffin's Citadel Investment Group dumped the biggest investment of the "upper crust" of funds watched by Insider Monkey, valued at about $0.7 million in call options. Ken Griffin's fund, Citadel Investment Group, also said goodbye to its call options, about $0.3 million worth. These moves are important to note, as total hedge fund interest was cut by 2 funds heading into Q4.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as KNOT Offshore Partners LP (NYSE:KNOP) but similarly valued. We will take a look at MacroGenics Inc (NASDAQ:MGNX), National Presto Industries Inc. (NYSE:NPK), TechTarget Inc (NASDAQ:TTGT), and Nicolet Bankshares Inc. (NASDAQ:NCBS). This group of stocks' market values resemble KNOP's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MGNX,14,92212,-5 NPK,9,70014,-3 TTGT,14,59178,-2 NCBS,5,9496,1 Average,10.5,57725,-2.25 [/table]

View table hereif you experience formatting issues.

As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $58 million. That figure was $21 million in KNOP's case. MacroGenics Inc (NASDAQ:MGNX) is the most popular stock in this table. On the other hand Nicolet Bankshares Inc. (NASDAQ:NCBS) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks KNOT Offshore Partners LP (NYSE:KNOP) is even less popular than NCBS. Hedge funds dodged a bullet by taking a bearish stance towards KNOP. Our calculations showed that the top 20 most popular hedge fund stocks returned 34.7% in 2019 through November 22nd and outperformed the S&P 500 ETF (SPY) by 8.5 percentage points. Unfortunately KNOP wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); KNOP investors were disappointed as the stock returned 2.2% during the fourth quarter (through 11/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market so far in Q4.

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

Related Content

Read the original post:

Here is What Hedge Funds Think About KNOT Offshore Partners LP (KNOP) - Yahoo Finance

]]> Scarlett Evans (SE): What does your team hope to achieve from the funding received?

Vahid Vaziri (VV): We are working on a wide range of projects, from novel drilling techniques to AI. One of the companies we are working with through OGIC is looking at analysing data taken from downhole calipers to understand the condition of the well being examined. The main thing we want to achieve across all of our projects is to help modernise the oil and gas industry. Although it is a relatively modern industry already, there are still some parts that are still conservative, because whatever they are doing has worked for years, so why should they change it?

Pressure from cost-cutting and environmental concerns are beginning to make people want things to be more efficient and have a lower carbon footprint. Over the last few years there has just been more motivation to use new technologies and modern science to streamline operations.

Any facility you see in oil and gas is already really impressive, but when you go into the details of techniques and machines, there are some parts that you can improve.

VV: Resonance Enhanced Drilling (RED) is the core of our novel and patented technology invented by CADR funding director, Professor Marian Wiercigroch, with the general idea being to change the basic mechanics behind drilling.

The traditional means of drilling uses pressure and rotation to cause a shearing, or gouging action that uses a low frequency and high amplitude that is actually quite dangerous and invasive. While it does work in some applications, its not widely popular as it compromises borehole stability. By contrast, RED uses a high frequency and low amplitude vibration to create a microcrack around the drill bit, making it far easier to shear, as well as less energy-intensive.

The main question were facing is how to produce this effect downhole, and how it will affect the rest of the drill string. We currently have two prototypes, which use different technology to produce the vibration, which we are testing in the lab.

VV: Ideally, in the future we want a tool that can read the data from whats going on around it the response of the vibration, and change its own frequency as it goes down. By using this technology that recognises the stiffness of the formation, you can get a much higher improvement factor and make operations much more efficient. All the engineering aspects of this already exists, the knowledge exists. Until now, its just been a question of licensing and finance, as well as the motivation to use it.

The first step is we are going to build and test a minimum viable product (MVP) for some field trials. As soon as we have done the trial, then we can move onto the next step. We have all the pieces of the puzzle, we just need to put them together.

VV: We have also been looking quite extensively at drill-string dynamics. Drill string is prone to many sorts of self-induced vibrations because of bit-rock interactions, borehole drill-pipe interaction etc. We develop our own drill string lab to study its dynamics, bit-rock interactions, the performance of downhole tools and in general to predict what problems can come up while drilling, and how to mitigate them.

One of the worst-case scenarios in drilling is the stick slip vibration when the drill bit gets stuck, and then goes fast up to 10 times of its nominal speed. In this scenario, the drill bit can easily get damaged, and then you need to take a few km of the drill-pipe out and replace the drill bit. Thats cost every moment in the rig is cost, especially in the offshore industry. So if you can reduce that, if you can avoid all these changes and time lost, that is not just money saved, it also helps to reduce environmental damage.

VV: Im not in a position to talk about the entire industrys future of course, but one this is clear to me: there are a lot of things, some of them very basic, that could use new technologies to improve.

Drilling is an obvious example of this. At the moment the most common way of drilling is just to exert force and torque to the drill-bit. But there are better ways you need to think of how you can drill more efficiently, with a smaller carbon footprint. When you drill offshore, the energy you use has a very direct impact on the area around it. So you want to be able to drill in a much more delicate way, with a far smaller impact on the surrounding environment.

Improving the techniques used in oil and gas would also have a beneficial effect on the wider energy industry such as geothermal. This method of energy production also requires drilling, and if you can drill to six or seven km, you would have much better access to the earths energy. Additionally, existing oil and gas technology can be used to inform the installation of wind turbines, we can install them on the offshore platforms we already have.

I dont see improving technology in oil and gas as having a temporary benefit, its going to continue to be used in a variety of fields. Instead of starting things from scratch, we can apply these methods across the board.

The rest is here:

Inside the University of Aberdeen's offshore drilling of the future project - Offshore Technology

Heimdal platform courtesy of Equinor

By The Maritime Executive 2019-11-29 17:16:15

Two Equinor employees were injured when a portable nitrogen gas bottle exploded on board the Heimdal platform in the North Sea on Thursday November 28.

The two injured employees, a man (22) and a woman (19), were taken care of by health personnel on board Heimdal and were transported to Haukeland University Hospital and Stavanger University Hospital. Their injuries are not life-threatening.

This is a serious work-related incident that has strongly affected all of us. Our main priority now is to keep following up and supporting our injured personnel and their next-of-kin. Their colleagues on Heimdal, where the incident occurred, are also being taken care of and we have sent extra personnel offshore to support them, says Arne Sigve Nylund, executive vice president for Development and Production Norway.

There were 70 personnel on board the platform when the incident occurred.

It is too early to say something about the cause of the incident, says Equinor. The Petroleum Safety Authority Norway and the police have travelled to the platform to start their investigations.

We have also initiated an internal investigation, and we are helping the police and other relevant authorities carry out their investigations in the best possible way, says Nylund.

He adds that a controlled production shutdown on Heimdal is planned.

Heimdal is a gas field west of Sveio in Hordaland county, in the northern part of the North Sea, north of Johan Sverdrup and south of Oseberg, near the border with the U.K. shelf. Current Heimdal partners are Equinor (29.4 percent - operator), Petoro (20.0 percent), Total E&P Norge (16.7 percent), Spirit Energy (28.8 percent) and LOTOS Exploration and Production (5.0 percent).

See the original post here:

Two Injured in Offshore Explosion - The Maritime Executive