Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
NII Holdings, Inc. (NASDAQ:NIHD) was in 8 hedge funds’ portfolios at the end of the third quarter of 2015. NII Holdings, Inc. (NASDAQ:NIHD) shareholders have witnessed an increase in activity from the world’s largest hedge funds in recent months. At the end of this article, will also compare NII Holdings, Inc. (NASDAQ:NIHD) to other stocks, including Iconix Brand Group Inc (NASDAQ:ICON), Ambac Financial Group, Inc. (NASDAQ:AMBC), and Fabrinet (NYSE:FN) to get a better sense of its popularity.
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In the financial world, there are numerous metrics that market participants put to use to size up stocks. A duo of the less known metrics are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the best picks of the top hedge fund managers can beat the market by a significant margin (see the details here).
Keeping this in mind, let’s go over the latest action encompassing NII Holdings, Inc. (NASDAQ:NIHD).
Hedge fund activity in NII Holdings, Inc. (NASDAQ:NIHD)
Heading into Q4, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, GoldenTree Asset Management, managed by Steven Tananbaum, holds the biggest position in NII Holdings, Inc. (NASDAQ:NIHD). GoldenTree Asset Management has a $29.2 million position in the stock, comprising 4.8% of its 13F portfolio. Coming in second is Michael A. Price and Amos Meron of Empyrean Capital Partners, with a $26.1 million position; the fund has 1.3% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that are bullish include Andy Redleaf’s Whitebox Advisors, Michael Novogratz’s Fortress Investment Group and Curtis Schenker and Craig Effron’s Scoggin.
With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. The funds with new positions in the stock are Whitebox Advisors, Fortress Investment Group, and Scoggin.
Let’s now review hedge fund activity in other stocks similar to NII Holdings, Inc. (NASDAQ:NIHD). We will take a look at Iconix Brand Group Inc (NASDAQ:ICON), Ambac Financial Group, Inc. (NASDAQ:AMBC), Fabrinet (NYSE:FN), and WL Ross Holding Corp (NASDAQ:WLRH). This group of stocks’ market values matches NII Holdings, Inc. (NASDAQ:NIHD)’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ICON | 11 | 156905 | -7 |
| AMBC | 27 | 177840 | -2 |
| FN | 20 | 115402 | 7 |
| WLRH | 13 | 141759 | 2 |
As you can see, these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $148 million. That figure was $84 million in NII Holdings, Inc. (NASDAQ:NIHD)’s case. Ambac Financial Group, Inc. (NASDAQ:AMBC) is the most popular stock in this table. On the other hand, Iconix Brand Group Inc (NASDAQ:ICON) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks, NII Holdings, Inc. (NASDAQ:NIHD) is even less popular than Iconix Brand Group Inc (NASDAQ:ICON). Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case, more research is warranted.
