Insider Monkey has processed numerous 13F filings of hedge funds and famous investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds and investors’ positions as of the end of the third quarter. You can find write-ups about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves and analyze what the smart money thinks of Nielsen Holdings plc (NYSE:NLSN) based on that data.
Is Nielsen Holdings plc (NYSE:NLSN) a good stock to buy now? The smart money is becoming hopeful. The number of long hedge fund bets increased by 14 recently. Our calculations also showed that nlsn isn’t among the 30 most popular stocks among hedge funds.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Let’s take a look at the latest hedge fund action encompassing Nielsen Holdings plc (NYSE:NLSN).
Hedge fund activity in Nielsen Holdings plc (NYSE:NLSN)
At Q3’s end, a total of 35 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 67% from one quarter earlier. By comparison, 24 hedge funds held shares or bullish call options in NLSN heading into this year. 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 Nielsen Holdings plc (NYSE:NLSN) was held by Chieftain Capital, which reported holding $158.3 million worth of stock at the end of September. It was followed by Ariel Investments with a $150.5 million position. Other investors bullish on the company included Elliott Management, Deccan Value Advisors, and Omega Advisors.
As one would reasonably expect, specific money managers were breaking ground themselves. Elliott Management, managed by Paul Singer, created the most outsized position in Nielsen Holdings plc (NYSE:NLSN). Elliott Management had $138.3 million invested in the company at the end of the quarter. Leon Cooperman’s Omega Advisors also initiated a $100.5 million position during the quarter. The other funds with new positions in the stock are John Paulson’s Paulson & Co, Paul Singer’s Elliott Management, and James Dinan’s York Capital Management.
Let’s go over hedge fund activity in other stocks similar to Nielsen Holdings plc (NYSE:NLSN). We will take a look at Spirit AeroSystems Holdings, Inc. (NYSE:SPR), Alleghany Corporation (NYSE:Y), Lamb Weston Holdings, Inc. (NYSE:LW), and Zions Bancorporation, National Association (NASDAQ:ZION). This group of stocks’ market values resemble NLSN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SPR | 32 | 2730557 | 2 |
| Y | 21 | 366277 | -3 |
| LW | 34 | 909479 | 5 |
| ZION | 32 | 797532 | -2 |
| Average | 29.75 | 1200961 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.75 hedge funds with bullish positions and the average amount invested in these stocks was $1.20 billion. That figure was $1.09 billion in NLSN’s case. Lamb Weston Holdings, Inc. (NYSE:LW) is the most popular stock in this table. On the other hand Alleghany Corporation (NYSE:Y) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks Nielsen Holdings plc (NYSE:NLSN) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None. This article was originally published at Insider Monkey.
