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. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about Nexa Resources S.A. (NYSE:NEXA)?
Is Nexa Resources S.A. (NYSE:NEXA) undervalued? Money managers are turning less bullish. The number of long hedge fund positions were cut by 1 lately. Our calculations also showed that NEXA 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). NEXA was in 4 hedge funds’ portfolios at the end of March. There were 5 hedge funds in our database with NEXA holdings at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most stock holders, hedge funds are seen as underperforming, old investment vehicles of the past. While there are greater than 8000 funds trading at the moment, Our researchers hone in on the aristocrats of this club, about 850 funds. These hedge fund managers have their hands on most of all hedge funds’ total asset base, and by keeping an eye on their highest performing investments, Insider Monkey has figured out several investment strategies that have historically exceeded the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Paul Marshall of Marshall Wace
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. 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 S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to take a look at the recent hedge fund action encompassing Nexa Resources S.A. (NYSE:NEXA).
How are hedge funds trading Nexa Resources S.A. (NYSE:NEXA)?
At Q1’s end, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -20% from one quarter earlier. On the other hand, there were a total of 11 hedge funds with a bullish position in NEXA 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.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies has the most valuable position in Nexa Resources S.A. (NYSE:NEXA), worth close to $1.7 million, accounting for less than 0.1%% of its total 13F portfolio. The second largest stake is held by Millennium Management, led by Israel Englander, holding a $0.3 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other peers that hold long positions include D. E. Shaw’s D E Shaw, Paul Marshall and Ian Wace’s Marshall Wace LLP and . In terms of the portfolio weights assigned to each position Renaissance Technologies allocated the biggest weight to Nexa Resources S.A. (NYSE:NEXA), around 0.0017% of its 13F portfolio. Millennium Management is also relatively very bullish on the stock, designating 0.0006 percent of its 13F equity portfolio to NEXA.
Since Nexa Resources S.A. (NYSE:NEXA) has experienced a decline in interest from hedge fund managers, it’s safe to say that there were a few funds who were dropping their positions entirely in the third quarter. Interestingly, Peter Muller’s PDT Partners dumped the biggest stake of the 750 funds tracked by Insider Monkey, comprising close to $0.2 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital was right behind this move, as the fund said goodbye to about $0.1 million worth. These moves are interesting, as total hedge fund interest fell by 1 funds in the third quarter.
Let’s check out hedge fund activity in other stocks similar to Nexa Resources S.A. (NYSE:NEXA). We will take a look at Sinovac Biotech Ltd. (NASDAQ:SVA), Peoples Bancorp Inc. (NASDAQ:PEBO), Evolent Health Inc (NYSE:EVH), and Core Laboratories N.V. (NYSE:CLB). All of these stocks’ market caps resemble NEXA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SVA | 3 | 56861 | -1 |
| PEBO | 11 | 19179 | 0 |
| EVH | 13 | 33227 | -3 |
| CLB | 16 | 33560 | -9 |
| Average | 10.75 | 35707 | -3.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $36 million. That figure was $2 million in NEXA’s case. Core Laboratories N.V. (NYSE:CLB) is the most popular stock in this table. On the other hand Sinovac Biotech Ltd. (NASDAQ:SVA) is the least popular one with only 3 bullish hedge fund positions. Nexa Resources S.A. (NYSE:NEXA) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 8.3% in 2020 through the end of May and surpassed the market by 13.2 percentage points. Unfortunately NEXA wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); NEXA investors were disappointed as the stock returned 15.8% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Follow Nexa Resources S.a. (NYSE:NEXA)
Follow Nexa Resources S.a. (NYSE:NEXA)
Disclosure: None. This article was originally published at Insider Monkey.
