After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards New Fortress Energy LLC (NASDAQ:NFE).
Is New Fortress Energy LLC (NASDAQ:NFE) a bargain? Hedge funds are in a bearish mood. The number of bullish hedge fund positions decreased by 1 recently. Our calculations also showed that NFE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). NFE was in 4 hedge funds’ portfolios at the end of September. There were 5 hedge funds in our database with NFE positions at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To most stock holders, hedge funds are viewed as underperforming, outdated investment tools of the past. While there are over 8000 funds with their doors open at present, We look at the leaders of this club, about 750 funds. These hedge fund managers preside over the lion’s share of the hedge fund industry’s total capital, and by tailing their unrivaled investments, Insider Monkey has revealed numerous investment strategies that have historically surpassed Mr. Market. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points a 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 .
Israel Englander of Millennium Management
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. 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 even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. Keeping this in mind let’s take a peek at the recent hedge fund action regarding New Fortress Energy LLC (NASDAQ:NFE).
What does smart money think about New Fortress Energy LLC (NASDAQ:NFE)?
At Q3’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 0 hedge funds with a bullish position in NFE a year ago. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Todd J. Kantor’s Encompass Capital Advisors has the most valuable position in New Fortress Energy LLC (NASDAQ:NFE), worth close to $30.2 million, corresponding to 2.1% of its total 13F portfolio. On Encompass Capital Advisors’s heels is Millennium Management, managed by Israel Englander, which holds a $0.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that hold long positions consist of David Harding’s Winton Capital Management, Steve Pattyn’s Yaupon Capital and . In terms of the portfolio weights assigned to each position Encompass Capital Advisors allocated the biggest weight to New Fortress Energy LLC (NASDAQ:NFE), around 2.07% of its 13F portfolio. Yaupon Capital is also relatively very bullish on the stock, earmarking 0.17 percent of its 13F equity portfolio to NFE.
Seeing as New Fortress Energy LLC (NASDAQ:NFE) has experienced bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there were a few fund managers who were dropping their entire stakes last quarter. Interestingly, Stanley Druckenmiller’s Duquesne Capital dropped the biggest position of the 750 funds tracked by Insider Monkey, comprising an estimated $14.1 million in stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund cut about $0.2 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 1 funds last quarter.
Let’s go over hedge fund activity in other stocks similar to New Fortress Energy LLC (NASDAQ:NFE). These stocks are Yamana Gold Inc. (NYSE:AUY), Medpace Holdings, Inc. (NASDAQ:MEDP), FS KKR Capital Corp. (NASDAQ:FSK), and Omnicell, Inc. (NASDAQ:OMCL). This group of stocks’ market caps are similar to NFE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AUY | 20 | 223608 | 2 |
| MEDP | 20 | 177896 | 5 |
| FSK | 22 | 211845 | 6 |
| OMCL | 11 | 102788 | -7 |
| Average | 18.25 | 179034 | 1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.25 hedge funds with bullish positions and the average amount invested in these stocks was $179 million. That figure was $31 million in NFE’s case. FS KKR Capital Corp. (NASDAQ:FSK) is the most popular stock in this table. On the other hand Omnicell, Inc. (NASDAQ:OMCL) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks New Fortress Energy LLC (NASDAQ:NFE) is even less popular than OMCL. Hedge funds dodged a bullet by taking a bearish stance towards NFE. 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 NFE wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); NFE investors were disappointed as the stock returned -17% 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.