The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 873 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their June 30th holdings, data that is available nowhere else. Should you consider Nordson Corporation (NASDAQ:NDSN) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is Nordson Corporation (NASDAQ:NDSN) a superb investment today? Hedge funds were taking an optimistic view. The number of bullish hedge fund bets increased by 8 lately. Nordson Corporation (NASDAQ:NDSN) was in 34 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 29. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that NDSN isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, we like undervalued, EBITDA-positive growth stocks, so we are checking out stock pitches like this emerging biotech stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to analyze the recent hedge fund action encompassing Nordson Corporation (NASDAQ:NDSN).
Do Hedge Funds Think NDSN Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 34 of the hedge funds tracked by Insider Monkey were long this stock, a change of 31% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in NDSN over the last 24 quarters. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Citadel Investment Group, managed by Ken Griffin, holds the most valuable position in Nordson Corporation (NASDAQ:NDSN). Citadel Investment Group has a $72.8 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Greenhouse Funds, managed by Joe Milano, which holds a $40.6 million position; the fund has 3.5% of its 13F portfolio invested in the stock. Other peers with similar optimism encompass Robert Joseph Caruso’s Select Equity Group, Cliff Asness’s AQR Capital Management and D. E. Shaw’s D E Shaw. In terms of the portfolio weights assigned to each position Greenhouse Funds allocated the biggest weight to Nordson Corporation (NASDAQ:NDSN), around 3.55% of its 13F portfolio. Jade Capital Advisors is also relatively very bullish on the stock, earmarking 0.82 percent of its 13F equity portfolio to NDSN.
Now, key money managers were leading the bulls’ herd. Select Equity Group, managed by Robert Joseph Caruso, established the most valuable position in Nordson Corporation (NASDAQ:NDSN). Select Equity Group had $35.8 million invested in the company at the end of the quarter. Ray Dalio’s Bridgewater Associates also made a $4.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Paul Marshall and Ian Wace’s Marshall Wace LLP, Robert Vincent McHugh’s Jade Capital Advisors, and Phil Frohlich’s Prescott Group Capital Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Nordson Corporation (NASDAQ:NDSN) but similarly valued. These stocks are Vail Resorts, Inc. (NYSE:MTN), The Gap Inc. (NYSE:GPS), FactSet Research Systems Inc. (NYSE:FDS), Quanta Services Inc (NYSE:PWR), Steel Dynamics, Inc. (NASDAQ:STLD), Fidelity National Financial Inc (NYSE:FNF), and Atmos Energy Corporation (NYSE:ATO). This group of stocks’ market caps are closest to NDSN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MTN | 40 | 883541 | 4 |
| GPS | 43 | 910661 | 1 |
| FDS | 28 | 490774 | -2 |
| PWR | 40 | 945202 | 7 |
| STLD | 26 | 538358 | 0 |
| FNF | 34 | 1303820 | -5 |
| ATO | 18 | 83813 | 3 |
| Average | 32.7 | 736596 | 1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.7 hedge funds with bullish positions and the average amount invested in these stocks was $737 million. That figure was $312 million in NDSN’s case. The Gap Inc. (NYSE:GPS) is the most popular stock in this table. On the other hand Atmos Energy Corporation (NYSE:ATO) is the least popular one with only 18 bullish hedge fund positions. Nordson Corporation (NASDAQ:NDSN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NDSN is 72. 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 21.8% in 2021 through October 11th and still beat the market by 4.4 percentage points. Hedge funds were also right about betting on NDSN as the stock returned 8.6% since the end of Q2 (through 10/11) 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.
