Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
Is Manning and Napier Inc (NYSE:MN) a bargain? Money managers are definitely selling. The number of bullish hedge fund bets that are revealed through the 13F filings shrunk by 1 recently. There were 11 hedge funds in our database with MN positions at the end of the previous quarter. At the end of this article we will also compare MN to other stocks including Cell Therapeutics Inc (NASDAQ:CTIC), Energy Fuels Inc Ordinary Shares (Canada) (NYSEMKT:UUUU), and Neos Therapeutics Inc (NASDAQ:NEOS) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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With all of this in mind, we’re going to review the recent action encompassing Manning and Napier Inc (NYSE:MN).
How have hedgies been trading Manning and Napier Inc (NYSE:MN)?
At Q3’s end, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -9% from the second quarter of 2016. By comparison, 10 hedge funds held shares or bullish call options in MN heading into this year. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, John W. Rogers of Ariel Investments holds the largest position in Manning and Napier Inc (NYSE:MN). Ariel Investments has a $10 million position in the stock, comprising 0.1% of its 13F portfolio. On Ariel Investments’s heels is Renaissance Technologies, one of the largest hedge funds in the world, holding a $7.6 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Some other members of the smart money that are bullish contain Chuck Royce’s Royce & Associates, Peter Algert and Kevin Coldiron’s Algert Coldiron Investors and John Overdeck and David Siegel’s Two Sigma Advisors. We should note that none of these elite funds are among our list of the 100 best performing elite funds which is based on the performance of their 13F long positions in non-microcap stocks.
Seeing as Manning and Napier Inc (NYSE:MN) has sustained bearish sentiment from hedge fund managers, we can see that there was a specific group of fund managers that slashed their entire stakes by the end of the third quarter. Interestingly, Anton Schutz’s Mendon Capital Advisors cut the biggest investment of all the hedgies followed by Insider Monkey, comprising an estimated $4.8 million in stock. Matthew Hulsizer’s fund, PEAK6 Capital Management, also dropped its call options, about $0.1 million worth.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Manning and Napier Inc (NYSE:MN) but similarly valued. We will take a look at Cell Therapeutics Inc (NASDAQ:CTIC), Energy Fuels Inc Ordinary Shares (Canada) (NYSEMKT:UUUU), Neos Therapeutics Inc (NASDAQ:NEOS), and Taseko Mines Limited (USA) (NYSEAMEX:TGB). This group of stocks’ market valuations resemble MN’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CTIC | 8 | 17825 | -1 |
| UUUU | 6 | 2550 | -1 |
| NEOS | 5 | 6246 | -1 |
| TGB | 4 | 6137 | 0 |
As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $8 million. That figure was $24 million in MN’s case. Cell Therapeutics Inc (NASDAQ:CTIC) is the most popular stock in this table. On the other hand Taseko Mines Limited (USA) (NYSEAMEX:TGB) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Manning and Napier Inc (NYSE:MN) 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.
Disclosure: None
