With the second-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the third quarter of 2021. One of these stocks was Norwegian Cruise Line Holdings Ltd (NYSE:NCLH).
Is Norwegian Cruise Line Holdings Ltd (NYSE:NCLH) a bargain? The best stock pickers were taking a bullish view. The number of long hedge fund bets advanced by 9 in recent months. Norwegian Cruise Line Holdings Ltd (NYSE:NCLH) was in 43 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 42. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that NCLH isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
According to most shareholders, hedge funds are perceived as underperforming, old investment vehicles of the past. While there are over 8000 funds with their doors open today, We hone in on the aristocrats of this club, approximately 850 funds. It is estimated that this group of investors have their hands on the majority of the hedge fund industry’s total capital, and by tracking their unrivaled picks, Insider Monkey has spotted a number of investment strategies that have historically outperformed the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.
Bill Miller of Miller Value Partners
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, artificial intelligence is one of the fastest-growing industries right now, so we are checking out stock pitches like this emerging AI 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. Keeping this in mind we’re going to check out the new hedge fund action surrounding Norwegian Cruise Line Holdings Ltd (NYSE:NCLH).
Do Hedge Funds Think NCLH Is A Good Stock To Buy Now?
At second quarter’s end, a total of 43 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 26% from one quarter earlier. By comparison, 28 hedge funds held shares or bullish call options in NCLH 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 Norwegian Cruise Line Holdings Ltd (NYSE:NCLH) was held by Miller Value Partners, which reported holding $117.3 million worth of stock at the end of June. It was followed by Citadel Investment Group with a $103.8 million position. Other investors bullish on the company included Millennium Management, Pentwater Capital Management, and MIG Capital. In terms of the portfolio weights assigned to each position Shelter Haven Capital Management allocated the biggest weight to Norwegian Cruise Line Holdings Ltd (NYSE:NCLH), around 4.93% of its 13F portfolio. Franklin Street Capital is also relatively very bullish on the stock, setting aside 4.25 percent of its 13F equity portfolio to NCLH.
With a general bullishness amongst the heavyweights, some big names have jumped into Norwegian Cruise Line Holdings Ltd (NYSE:NCLH) headfirst. Millennium Management, managed by Israel Englander, established the most outsized position in Norwegian Cruise Line Holdings Ltd (NYSE:NCLH). Millennium Management had $69.8 million invested in the company at the end of the quarter. John M. Angelo and Michael L. Gordon’s Angelo Gordon & Co also made a $29.6 million investment in the stock during the quarter. The following funds were also among the new NCLH investors: Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, Dmitry Balyasny’s Balyasny Asset Management, and Jerry Kochanski’s Shelter Haven Capital Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Norwegian Cruise Line Holdings Ltd (NYSE:NCLH) but similarly valued. These stocks are Five Below Inc (NASDAQ:FIVE), LPL Financial Holdings Inc (NASDAQ:LPLA), Gaming and Leisure Properties Inc (NASDAQ:GLPI), Jazz Pharmaceuticals Plc (NASDAQ:JAZZ), Cleveland-Cliffs Inc (NYSE:CLF), Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI), and Marathon Oil Corporation (NYSE:MRO). This group of stocks’ market values match NCLH’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FIVE | 42 | 783248 | -1 |
| LPLA | 48 | 1500930 | 10 |
| GLPI | 27 | 515879 | -1 |
| JAZZ | 34 | 1493732 | -3 |
| CLF | 44 | 1111037 | 8 |
| MRVI | 20 | 572985 | -6 |
| MRO | 34 | 655729 | 5 |
| Average | 35.6 | 947649 | 1.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 35.6 hedge funds with bullish positions and the average amount invested in these stocks was $948 million. That figure was $607 million in NCLH’s case. LPL Financial Holdings Inc (NASDAQ:LPLA) is the most popular stock in this table. On the other hand Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI) is the least popular one with only 20 bullish hedge fund positions. Norwegian Cruise Line Holdings Ltd (NYSE:NCLH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NCLH is 81.1. 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 22.9% in 2021 through October 1st and beat the market again by 5.6 percentage points. Unfortunately NCLH wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on NCLH were disappointed as the stock returned -3.7% since the end of June (through 10/1) 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 Norwegian Cruise Line Holdings Ltd. (NASDAQ:NCLH)
Follow Norwegian Cruise Line Holdings Ltd. (NASDAQ:NCLH)
Suggested Articles:
- 25 Fastest Growing CIties In the US
- 10 Best EV Stocks to Buy According to Cathie Wood
- 10 Best Growth Stocks To Buy Now
Disclosure: None. This article was originally published at Insider Monkey.
