We at Insider Monkey have gone over 738 13F filings that hedge funds and famous value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article we look at what those investors think of Nokia Corporation (NYSE:NOK).
Nokia Corporation (NYSE:NOK) has experienced a decrease in support from the world’s most elite money managers recently. Our calculations also showed that NOK 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 40 percentage points since May 2014 through May 30, 2019 (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.
We’re going to take a look at the key hedge fund action encompassing Nokia Corporation (NYSE:NOK).
How have hedgies been trading Nokia Corporation (NYSE:NOK)?
At the end of the first quarter, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -4% from the fourth quarter of 2018. By comparison, 17 hedge funds held shares or bullish call options in NOK a year ago. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
Among these funds, Arrowstreet Capital held the most valuable stake in Nokia Corporation (NYSE:NOK), which was worth $151.2 million at the end of the first quarter. On the second spot was Ariel Investments which amassed $123.6 million worth of shares. Moreover, Point72 Asset Management, Citadel Investment Group, and Sandler Capital Management were also bullish on Nokia Corporation (NYSE:NOK), allocating a large percentage of their portfolios to this stock.
Judging by the fact that Nokia Corporation (NYSE:NOK) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there exists a select few fund managers who were dropping their full holdings in the third quarter. Interestingly, Dmitry Balyasny’s Balyasny Asset Management cut the biggest position of the 700 funds watched by Insider Monkey, comprising about $16 million in stock. Anand Parekh’s fund, Alyeska Investment Group, also dropped its stock, about $8.6 million worth. These moves are important to note, as total hedge fund interest fell by 1 funds in the third quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Nokia Corporation (NYSE:NOK) but similarly valued. These stocks are Nutrien Ltd. (NYSE:NTR), NetEase, Inc (NASDAQ:NTES), Square, Inc. (NYSE:SQ), and Canon Inc. (NYSE:CAJ). All of these stocks’ market caps resemble NOK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NTR | 25 | 389776 | -7 |
| NTES | 30 | 3366336 | 3 |
| SQ | 50 | 1399349 | 15 |
| CAJ | 7 | 93211 | 1 |
| Average | 28 | 1312168 | 3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28 hedge funds with bullish positions and the average amount invested in these stocks was $1312 million. That figure was $387 million in NOK’s case. Square, Inc. (NYSE:SQ) is the most popular stock in this table. On the other hand Canon Inc. (NYSE:CAJ) is the least popular one with only 7 bullish hedge fund positions. Nokia Corporation (NYSE:NOK) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately NOK wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); NOK investors were disappointed as the stock returned -10% during the same time period 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 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
