Hedge Funds Are Buying Navient Corp (NAVI)

How do we determine whether Navient Corp (NASDAQ:NAVI) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.

Is Navient Corp (NASDAQ:NAVI) a marvelous investment today? Hedge funds are turning bullish. The number of bullish hedge fund positions advanced by 6 recently. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Taubman Centers, Inc. (NYSE:TCO), Douglas Emmett, Inc. (NYSE:DEI), and Shell Midstream Partners LP (NYSE:SHLX) to gather more data points.

In today’s marketplace there are a large number of indicators stock traders put to use to value their stock investments. A pair of the less utilized indicators ais composed of hedge fund and insider trading signals. We have shown that, historically, those who follow the best picks of the top money managers can outpace the market by a superb amount (see the details here).

With all of this in mind, let’s take a look at the fresh action surrounding Navient Corp (NASDAQ:NAVI).

What does the smart money think about Navient Corp (NASDAQ:NAVI)?

Heading into Q4, a total of 38 of the hedge funds tracked by Insider Monkey were long this stock, a change of 19% from the previous quarter. With hedge funds’ sentiment swirling, there exist a few notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Leon Cooperman’s Omega Advisors has the biggest position in Navient Corp (NASDAQ:NAVI), worth close to $119.7 million, accounting for 2.4% of its total 13F portfolio. The second largest stake is held by D E Shaw, managed by D. E. Shaw, which holds an $92.3 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism include Cliff Asness’s AQR Capital Management, and Patrik Brummer’s Zenit Asset Management AB.

As aggregate interest increased, key money managers were leading the bulls’ herd. Carlson Capital, managed by Clint Carlson, established a position in Navient Corp (NASDAQ:NAVI). Carlson Capital had $50.6 million invested in the company at the end of the quarter. Ron Gutfleish’s Elm Ridge Capital also initiated an $9.6 million position during the quarter. The following funds were also among the new NAVI investors: Peter Muller’s PDT Partners, Neil Chriss’s Hutchin Hill Capital, and Larry Foley and Paul Farrell’s Bronson Point Partners.

Let’s also examine hedge fund activity in other stocks similar to Navient Corp (NASDAQ:NAVI). These stocks are Taubman Centers, Inc. (NYSE:TCO), Douglas Emmett, Inc. (NYSE:DEI), Shell Midstream Partners LP (NYSE:SHLX), and FNFV Group (NYSE:FNFV). This group of stocks’ market valuations are closest to NAVI’s market valuation.

As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $251 million. That figure was $507 million in NAVI’s case. FNFV Group (NYSE:FNFV) is the most popular stock in this table. On the other hand Shell Midstream Partners LP (NYSE:SHLX) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Navient Corp (NASDAQ:NAVI), with 38 bullish hedge fund positions, 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.