Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Nokia Corporation (NYSE:NOK).
Nokia Corporation (NYSE:NOK) was in 23 hedge funds’ portfolios at the end of March. NOK shareholders have witnessed an increase in activity from the world’s largest hedge funds in recent months. There were 16 hedge funds in our database with NOK positions at the end of the previous quarter. Our calculations also showed that NOK isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Today there are a lot of tools stock market investors can use to grade their holdings. Two of the less known tools are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the best picks of the best money managers can outclass the S&P 500 by a solid amount (see the details here).
John Rogers of Ariel Investments
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s take a gander at the recent hedge fund action encompassing Nokia Corporation (NYSE:NOK).
How are hedge funds trading Nokia Corporation (NYSE:NOK)?
At the end of the first quarter, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 44% from one quarter earlier. On the other hand, there were a total of 26 hedge funds with a bullish position in NOK a year ago. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
More specifically, Ariel Investments was the largest shareholder of Nokia Corporation (NYSE:NOK), with a stake worth $55.3 million reported as of the end of September. Trailing Ariel Investments was Arrowstreet Capital, which amassed a stake valued at $26.4 million. D E Shaw, Sirios Capital Management, and Renaissance Technologies 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 Boardman Bay Capital Management allocated the biggest weight to Nokia Corporation (NYSE:NOK), around 2.17% of its 13F portfolio. Sirios Capital Management is also relatively very bullish on the stock, designating 1.84 percent of its 13F equity portfolio to NOK.
As aggregate interest increased, key money managers were leading the bulls’ herd. Sirios Capital Management, managed by John Brennan, created the largest position in Nokia Corporation (NYSE:NOK). Sirios Capital Management had $20.8 million invested in the company at the end of the quarter. Renaissance Technologies also made a $11.1 million investment in the stock during the quarter. The other funds with brand new NOK positions are Dmitry Balyasny’s Balyasny Asset Management, John Hurley’s Cavalry Asset Management, and George McCabe’s Portolan Capital Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Nokia Corporation (NYSE:NOK) but similarly valued. We will take a look at Dollar Tree, Inc. (NASDAQ:DLTR), Citrix Systems, Inc. (NASDAQ:CTXS), Alexandria Real Estate Equities Inc (NYSE:ARE), and TransDigm Group Incorporated (NYSE:TDG). This group of stocks’ market values are closest to NOK’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DLTR | 42 | 1353619 | -9 |
| CTXS | 38 | 1418404 | 4 |
| ARE | 29 | 196351 | 8 |
| TDG | 58 | 3800759 | -5 |
| Average | 41.75 | 1692283 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 41.75 hedge funds with bullish positions and the average amount invested in these stocks was $1692 million. That figure was $178 million in NOK’s case. TransDigm Group Incorporated (NYSE:TDG) is the most popular stock in this table. On the other hand Alexandria Real Estate Equities Inc (NYSE:ARE) is the least popular one with only 29 bullish hedge fund positions. Compared to these stocks Nokia Corporation (NYSE:NOK) is even less popular than ARE. Hedge funds clearly dropped the ball on NOK as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th and still beat the market by 14.2 percentage points. A small number of hedge funds were also right about betting on NOK as the stock returned 43.5% so far in the second quarter and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
