Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Nielsen Holdings plc (NYSE:NLSN).
Nielsen Holdings plc (NYSE:NLSN) investors should pay attention to a decrease in hedge fund interest of late. Nielsen Holdings plc (NYSE:NLSN) was in 24 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 35. There were 28 hedge funds in our database with NLSN positions at the end of the second quarter. Our calculations also showed that NLSN isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Paul Singer of Elliott Management
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 review the new hedge fund action encompassing Nielsen Holdings plc (NYSE:NLSN).
Do Hedge Funds Think NLSN Is A Good Stock To Buy Now?
At Q3’s end, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of -14% from the previous quarter. On the other hand, there were a total of 30 hedge funds with a bullish position in NLSN a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Windacre Partnership was the largest shareholder of Nielsen Holdings plc (NYSE:NLSN), with a stake worth $675.6 million reported as of the end of September. Trailing Windacre Partnership was Elliott Investment Management, which amassed a stake valued at $318.6 million. Ariel Investments, Renaissance Technologies, and Arrowstreet Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Windacre Partnership allocated the biggest weight to Nielsen Holdings plc (NYSE:NLSN), around 15.06% of its 13F portfolio. Ariel Investments is also relatively very bullish on the stock, earmarking 2.46 percent of its 13F equity portfolio to NLSN.
Due to the fact that Nielsen Holdings plc (NYSE:NLSN) has experienced declining sentiment from hedge fund managers, logic holds that there was a specific group of hedge funds that slashed their entire stakes last quarter. Intriguingly, William von Mueffling’s Cantillon Capital Management said goodbye to the largest investment of all the hedgies tracked by Insider Monkey, comprising close to $105.4 million in stock. Mitch Kuflik and Rob Sobel’s fund, Brahman Capital, also cut its stock, about $96.7 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 4 funds last quarter.
Let’s go over hedge fund activity in other stocks similar to Nielsen Holdings plc (NYSE:NLSN). We will take a look at Descartes Systems Group (NASDAQ:DSGX), Littelfuse, Inc. (NASDAQ:LFUS), Colfax Corporation (NYSE:CFX), nCino, Inc. (NASDAQ:NCNO), Frontier Communications Parent Inc. (NASDAQ:FYBR), Ritchie Bros. Auctioneers (NYSE:RBA), and Thor Industries, Inc. (NYSE:THO). This group of stocks’ market values are closest to NLSN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DSGX | 14 | 379447 | -1 |
| LFUS | 24 | 526040 | -3 |
| CFX | 23 | 819033 | -8 |
| NCNO | 21 | 582525 | -4 |
| FYBR | 43 | 3539483 | 0 |
| RBA | 13 | 277550 | -9 |
| THO | 29 | 174266 | 3 |
| Average | 23.9 | 899763 | -3.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.9 hedge funds with bullish positions and the average amount invested in these stocks was $900 million. That figure was $1476 million in NLSN’s case. Frontier Communications Parent Inc. (NASDAQ:FYBR) is the most popular stock in this table. On the other hand Ritchie Bros. Auctioneers (NYSE:RBA) is the least popular one with only 13 bullish hedge fund positions. Nielsen Holdings plc (NYSE:NLSN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NLSN is 39.9. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately NLSN wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on NLSN were disappointed as the stock returned 8.5% since the end of September (through 12/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Nielsen Holdings Plc (NYSE:NLSN)
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Disclosure: None. This article was originally published at Insider Monkey.
