Here is What Hedge Funds Think About National Vision Holdings, Inc. (EYE)

Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards National Vision Holdings, Inc. (NASDAQ:EYE) changed recently.

Is National Vision Holdings, Inc. (NASDAQ:EYE) worth your attention right now? The smart money was getting less optimistic. The number of long hedge fund bets dropped by 5 in recent months. National Vision Holdings, Inc. (NASDAQ:EYE) was in 19 hedge funds’ portfolios at the end of June. The all time high for this statistic is 25. Our calculations also showed that EYE isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 24 hedge funds in our database with EYE positions at the end of the first quarter.

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Phillip Gross of Adage Capital

With all of this in mind we’re going to take a gander at the key hedge fund action encompassing National Vision Holdings, Inc. (NASDAQ:EYE).

Do Hedge Funds Think EYE Is A Good Stock To Buy Now?

At the end of June, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -21% from the previous quarter. By comparison, 17 hedge funds held shares or bullish call options in EYE a year ago. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).

More specifically, Adage Capital Management was the largest shareholder of National Vision Holdings, Inc. (NASDAQ:EYE), with a stake worth $213.3 million reported as of the end of June. Trailing Adage Capital Management was Arrowstreet Capital, which amassed a stake valued at $44.5 million. LMR Partners, Renaissance Technologies, and Impax Asset 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 LMR Partners allocated the biggest weight to National Vision Holdings, Inc. (NASDAQ:EYE), around 0.45% of its 13F portfolio. Adage Capital Management is also relatively very bullish on the stock, designating 0.42 percent of its 13F equity portfolio to EYE.

Because National Vision Holdings, Inc. (NASDAQ:EYE) has experienced a decline in interest from hedge fund managers, logic holds that there is a sect of hedgies who were dropping their full holdings last quarter. Intriguingly, Frank Fu’s CaaS Capital cut the largest stake of the 750 funds watched by Insider Monkey, valued at close to $6.3 million in stock. Michael Gelband’s fund, ExodusPoint Capital, also sold off its stock, about $1.8 million worth. These moves are important to note, as total hedge fund interest was cut by 5 funds last quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as National Vision Holdings, Inc. (NASDAQ:EYE) but similarly valued. We will take a look at Madison Square Garden Sports Corp. (NYSE:MSGS), Box, Inc. (NYSE:BOX), EnerSys (NYSE:ENS), Axis Capital Holdings Limited (NYSE:AXS), JBG SMITH Properties (NYSE:JBGS), Tegna Inc (NYSE:TGNA), and Arena Pharmaceuticals, Inc. (NASDAQ:ARNA). This group of stocks’ market caps are closest to EYE’s market cap.

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As you can see these stocks had an average of 25.6 hedge funds with bullish positions and the average amount invested in these stocks was $546 million. That figure was $357 million in EYE’s case. Madison Square Garden Sports Corp. (NYSE:MSGS) is the most popular stock in this table. On the other hand JBG SMITH Properties (NYSE:JBGS) is the least popular one with only 17 bullish hedge fund positions. National Vision Holdings, Inc. (NASDAQ:EYE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for EYE is 27.8. 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% in 2021 through October 22nd and still beat the market by 1.6 percentage points. A small number of hedge funds were also right about betting on EYE as the stock returned 18.3% since the end of the second quarter (through 10/22) and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.