In this article we will take a look at whether hedge funds think NVR, Inc. (NYSE:NVR) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is NVR, Inc. (NYSE:NVR) the right pick for your portfolio? Investors who are in the know were getting more bullish. The number of long hedge fund positions increased by 4 in recent months. NVR, Inc. (NYSE:NVR) was in 32 hedge funds’ portfolios at the end of September. The all time high for this statistic is 46. Our calculations also showed that NVR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Michael Gelband of ExodusPoint Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now let’s take a peek at the latest hedge fund action regarding NVR, Inc. (NYSE:NVR).
Do Hedge Funds Think NVR Is A Good Stock To Buy Now?
At third quarter’s end, a total of 32 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 14% from the previous quarter. The graph below displays the number of hedge funds with bullish position in NVR over the last 25 quarters. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
The largest stake in NVR, Inc. (NYSE:NVR) was held by Giverny Capital, which reported holding $73.7 million worth of stock at the end of September. It was followed by AQR Capital Management with a $67.8 million position. Other investors bullish on the company included Impala Asset Management, Markel Gayner Asset Management, and Renaissance Technologies. In terms of the portfolio weights assigned to each position Manor Road Capital Partners allocated the biggest weight to NVR, Inc. (NYSE:NVR), around 8.27% of its 13F portfolio. Guardian Point Capital is also relatively very bullish on the stock, earmarking 5.56 percent of its 13F equity portfolio to NVR.
As aggregate interest increased, specific money managers have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, initiated the largest position in NVR, Inc. (NYSE:NVR). Citadel Investment Group had $23.5 million invested in the company at the end of the quarter. Touk Sinantha’s AltraVue Capital also made a $16.8 million investment in the stock during the quarter. The other funds with brand new NVR positions are Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, Michael Gelband’s ExodusPoint Capital, and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as NVR, Inc. (NYSE:NVR) but similarly valued. We will take a look at Bentley Systems, Incorporated (NASDAQ:BSY), Entegris Inc (NASDAQ:ENTG), Akamai Technologies, Inc. (NASDAQ:AKAM), PagSeguro Digital Ltd. (NYSE:PAGS), Continental Resources, Inc. (NYSE:CLR), Wheaton Precious Metals Corp. (NYSE:WPM), and Boston Properties, Inc. (NYSE:BXP). This group of stocks’ market valuations match NVR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BSY | 18 | 141737 | 1 |
| ENTG | 26 | 1505122 | 1 |
| AKAM | 30 | 327872 | 0 |
| PAGS | 41 | 2446922 | 1 |
| CLR | 24 | 166253 | 1 |
| WPM | 27 | 347520 | 1 |
| BXP | 21 | 1471101 | 2 |
| Average | 26.7 | 915218 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.7 hedge funds with bullish positions and the average amount invested in these stocks was $915 million. That figure was $480 million in NVR’s case. PagSeguro Digital Ltd. (NYSE:PAGS) is the most popular stock in this table. On the other hand Bentley Systems, Incorporated (NASDAQ:BSY) is the least popular one with only 18 bullish hedge fund positions. NVR, Inc. (NYSE:NVR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NVR is 60.3. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Hedge funds were also right about betting on NVR as the stock returned 9% since the end of Q3 (through 11/30) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
