How do we determine whether Natural Gas Services Group, Inc. (NYSE:NGS) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
Is Natural Gas Services Group, Inc. (NYSE:NGS) the right pick for your portfolio? The best stock pickers are betting on the stock. The number of long hedge fund bets improved by 3 recently. Our calculations also showed that NGS isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To most shareholders, hedge funds are seen as slow, old investment tools of years past. While there are greater than 8000 funds with their doors open today, Our experts choose to focus on the leaders of this club, about 750 funds. It is estimated that this group of investors shepherd most of the smart money’s total capital, and by paying attention to their unrivaled equity investments, Insider Monkey has revealed various investment strategies that have historically outpaced Mr. Market. 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 May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Chuck Royce of Royce & Associates
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a peek at the latest hedge fund action regarding Natural Gas Services Group, Inc. (NYSE:NGS).
How have hedgies been trading Natural Gas Services Group, Inc. (NYSE:NGS)?
Heading into the fourth quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 43% from the previous quarter. On the other hand, there were a total of 8 hedge funds with a bullish position in NGS a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Natural Gas Services Group, Inc. (NYSE:NGS) was held by Renaissance Technologies, which reported holding $8.4 million worth of stock at the end of September. It was followed by Spitfire Capital with a $3.1 million position. Other investors bullish on the company included Royce & Associates, D E Shaw, and Two Sigma Advisors. In terms of the portfolio weights assigned to each position Spitfire Capital allocated the biggest weight to Natural Gas Services Group, Inc. (NYSE:NGS), around 3.98% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, setting aside 0.03 percent of its 13F equity portfolio to NGS.
Now, key money managers have jumped into Natural Gas Services Group, Inc. (NYSE:NGS) headfirst. Citadel Investment Group, managed by Ken Griffin, created the most outsized position in Natural Gas Services Group, Inc. (NYSE:NGS). Citadel Investment Group had $0.3 million invested in the company at the end of the quarter. David Harding’s Winton Capital Management also made a $0.3 million investment in the stock during the quarter. The following funds were also among the new NGS investors: Michael Gelband’s ExodusPoint Capital, Paul Marshall and Ian Wace’s Marshall Wace, and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Natural Gas Services Group, Inc. (NYSE:NGS) but similarly valued. We will take a look at Turtle Beach Corporation (NASDAQ:HEAR), American Superconductor Corporation (NASDAQ:AMSC), Riverview Bancorp, Inc. (NASDAQ:RVSB), and Pieris Pharmaceuticals, Inc. (NASDAQ:PIRS). All of these stocks’ market caps match NGS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HEAR | 10 | 15152 | -3 |
| AMSC | 12 | 27200 | 1 |
| RVSB | 10 | 6350 | 2 |
| PIRS | 11 | 38716 | -1 |
| Average | 10.75 | 21855 | -0.25 |
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 $22 million. That figure was $16 million in NGS’s case. American Superconductor Corporation (NASDAQ:AMSC) is the most popular stock in this table. On the other hand Turtle Beach Corporation (NASDAQ:HEAR) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Natural Gas Services Group, Inc. (NYSE:NGS) is even less popular than HEAR. Hedge funds dodged a bullet by taking a bearish stance towards NGS. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately NGS wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); NGS investors were disappointed as the stock returned -15.4% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
