The 700+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Northern Technologies International Corp (NASDAQ:NTIC).
Northern Technologies International Corp (NASDAQ:NTIC) shareholders have witnessed an increase in enthusiasm from smart money of late. NTIC was in 5 hedge funds’ portfolios at the end of the third quarter of 2019. There were 3 hedge funds in our database with NTIC holdings at the end of the previous quarter. Our calculations also showed that NTIC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Jeffrey Bronchick of Cove Street Capital
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. With all of this in mind we’re going to take a look at the latest hedge fund action surrounding Northern Technologies International Corp (NASDAQ:NTIC).
How are hedge funds trading Northern Technologies International Corp (NASDAQ:NTIC)?
Heading into the fourth quarter of 2019, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of 67% from the previous quarter. The graph below displays the number of hedge funds with bullish position in NTIC over the last 17 quarters. So, let’s check out 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, Rutabaga Capital Management, managed by Peter Schliemann, holds the number one position in Northern Technologies International Corp (NASDAQ:NTIC). Rutabaga Capital Management has a $4 million position in the stock, comprising 1.4% of its 13F portfolio. Sitting at the No. 2 spot is Cove Street Capital, led by Jeffrey Bronchick, holding a $1.7 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions consist of Renaissance Technologies, Thomas E. Lynch’s Mill Road Capital Management and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital. In terms of the portfolio weights assigned to each position Rutabaga Capital Management allocated the biggest weight to Northern Technologies International Corp (NASDAQ:NTIC), around 1.42% of its 13F portfolio. Mill Road Capital Management is also relatively very bullish on the stock, dishing out 0.66 percent of its 13F equity portfolio to NTIC.
As one would reasonably expect, key hedge funds were breaking ground themselves. Mill Road Capital Management, managed by Thomas E. Lynch, initiated the biggest position in Northern Technologies International Corp (NASDAQ:NTIC). Mill Road Capital Management had $0.4 million invested in the company at the end of the quarter. Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital also initiated a $0 million position during the quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Northern Technologies International Corp (NASDAQ:NTIC) but similarly valued. We will take a look at T2 Biosystems Inc (NASDAQ:TTOO), Gamida Cell Ltd. (NASDAQ:GMDA), Ring Energy Inc (NYSEAMERICAN:REI), and Abeona Therapeutics Inc (NASDAQ:ABEO). All of these stocks’ market caps are similar to NTIC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TTOO | 5 | 1399 | -2 |
| GMDA | 6 | 11160 | -1 |
| REI | 8 | 2213 | -3 |
| ABEO | 15 | 32925 | -2 |
| Average | 8.5 | 11924 | -2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.5 hedge funds with bullish positions and the average amount invested in these stocks was $12 million. That figure was $8 million in NTIC’s case. Abeona Therapeutics Inc (NASDAQ:ABEO) is the most popular stock in this table. On the other hand T2 Biosystems Inc (NASDAQ:TTOO) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Northern Technologies International Corp (NASDAQ:NTIC) is even less popular than TTOO. Hedge funds dodged a bullet by taking a bearish stance towards NTIC. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately NTIC wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); NTIC investors were disappointed as the stock returned -0.8% during the fourth quarter (through the end of November) 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.
