The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on June 30th. We at Insider Monkey have made an extensive database of more than 873 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Mr. Cooper Group Inc. (NASDAQ:COOP) based on those filings.
Mr. Cooper Group Inc. (NASDAQ:COOP) has experienced an increase in hedge fund sentiment lately. Mr. Cooper Group Inc. (NASDAQ:COOP) was in 28 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 34. There were 24 hedge funds in our database with COOP positions at the end of the first quarter. Our calculations also showed that COOP isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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Parag Vora of HG Vora Capital Management
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Do Hedge Funds Think COOP Is A Good Stock To Buy Now?
At Q2’s end, a total of 28 of the hedge funds tracked by Insider Monkey were long this stock, a change of 17% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards COOP over the last 24 quarters. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
Among these funds, Omega Advisors held the most valuable stake in Mr. Cooper Group Inc. (NASDAQ:COOP), which was worth $140.5 million at the end of the second quarter. On the second spot was HG Vora Capital Management which amassed $135.5 million worth of shares. Diamond Hill Capital, Inherent Group, and Oaktree Capital Management 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 OCO Capital Partners allocated the biggest weight to Mr. Cooper Group Inc. (NASDAQ:COOP), around 23.62% of its 13F portfolio. Nierenberg Investment Management is also relatively very bullish on the stock, earmarking 20.83 percent of its 13F equity portfolio to COOP.
Now, some big names have been driving this bullishness. Millennium Management, managed by Israel Englander, initiated the biggest position in Mr. Cooper Group Inc. (NASDAQ:COOP). Millennium Management had $5.5 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also initiated a $2.2 million position during the quarter. The other funds with new positions in the stock are Marc Majzner’s Clearline Capital, Paul Tudor Jones’s Tudor Investment Corp, and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Mr. Cooper Group Inc. (NASDAQ:COOP) but similarly valued. These stocks are Laureate Education, Inc. (NASDAQ:LAUR), Nu Skin Enterprises, Inc. (NYSE:NUS), FormFactor, Inc. (NASDAQ:FORM), GrowGeneration Corp. (NASDAQ:GRWG), Arcosa, Inc. (NYSE:ACA), Brinker International, Inc. (NYSE:EAT), and California Water Service Group (NYSE:CWT). This group of stocks’ market caps are closest to COOP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LAUR | 20 | 203841 | -1 |
| NUS | 20 | 298814 | 1 |
| FORM | 20 | 167474 | 3 |
| GRWG | 17 | 128612 | -1 |
| ACA | 12 | 155930 | -5 |
| EAT | 31 | 353266 | 0 |
| CWT | 9 | 101040 | 1 |
| Average | 18.4 | 201282 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.4 hedge funds with bullish positions and the average amount invested in these stocks was $201 million. That figure was $660 million in COOP’s case. Brinker International, Inc. (NYSE:EAT) is the most popular stock in this table. On the other hand California Water Service Group (NYSE:CWT) is the least popular one with only 9 bullish hedge fund positions. Mr. Cooper Group Inc. (NASDAQ:COOP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for COOP is 76.9. 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 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. Hedge funds were also right about betting on COOP as the stock returned 28.5% since the end of Q2 (through 10/15) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Mr. Cooper Group Inc. (NASDAQ:COOP)
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Disclosure: None. This article was originally published at Insider Monkey.
