Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 750 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC) in this article.
Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC) has experienced a decrease in hedge fund sentiment of late. Our calculations also showed that NGVC isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Cliff Asness of AQR Capital Management
We’re going to view the key hedge fund action surrounding Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC).
How are hedge funds trading Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC)?
Heading into the second quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -17% from the fourth quarter of 2018. On the other hand, there were a total of 12 hedge funds with a bullish position in NGVC a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, managed by Jim Simons, holds the number one position in Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC). Renaissance Technologies has a $5.1 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is AQR Capital Management, managed by Cliff Asness, which holds a $4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors with similar optimism consist of D. E. Shaw’s D E Shaw, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Ken Griffin’s Citadel Investment Group.
Because Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC) has experienced a decline in interest from the smart money, it’s easy to see that there were a few hedge funds that elected to cut their full holdings heading into Q3. It’s worth mentioning that Thomas E. Claugus’s GMT Capital dumped the largest investment of all the hedgies watched by Insider Monkey, worth close to $10.9 million in stock. Richard Driehaus’s fund, Driehaus Capital, also sold off its stock, about $0.6 million worth. These moves are interesting, as total hedge fund interest dropped by 2 funds heading into Q3.
Let’s go over hedge fund activity in other stocks similar to Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC). These stocks are Century Casinos, Inc. (NASDAQ:CNTY), NACCO Industries, Inc. (NYSE:NC), Sierra Metals Inc. (NYSE:SMTS), and Ooma Inc (NYSE:OOMA). All of these stocks’ market caps resemble NGVC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CNTY | 6 | 57293 | 0 |
| NC | 9 | 12325 | 3 |
| SMTS | 1 | 28 | 1 |
| OOMA | 17 | 71271 | 2 |
| Average | 8.25 | 35229 | 1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $35 million. That figure was $17 million in NGVC’s case. Ooma Inc (NYSE:OOMA) is the most popular stock in this table. On the other hand Sierra Metals Inc. (NYSE:SMTS) is the least popular one with only 1 bullish hedge fund positions. Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but 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 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately NGVC wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on NGVC were disappointed as the stock returned -11.7% during the same 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.
