The 700+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards New Frontier Corp (NYSE:NFC).
New Frontier Corp (NYSE:NFC) investors should pay attention to a decrease in hedge fund interest lately. NFC was in 13 hedge funds’ portfolios at the end of March. There were 14 hedge funds in our database with NFC holdings at the end of the previous quarter. Our calculations also showed that NFC isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were 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’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to analyze the new hedge fund action regarding New Frontier Corp (NYSE:NFC).
Hedge fund activity in New Frontier Corp (NYSE:NFC)
At Q1’s end, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -7% from the previous quarter. By comparison, 0 hedge funds held shares or bullish call options in NFC a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
The largest stake in New Frontier Corp (NYSE:NFC) was held by Fir Tree, which reported holding $9.9 million worth of stock at the end of March. It was followed by Weiss Asset Management with a $7.8 million position. Other investors bullish on the company included HBK Investments, Glazer Capital, and Alyeska Investment Group.
Because New Frontier Corp (NYSE:NFC) has faced declining sentiment from the aggregate hedge fund industry, it’s easy to see that there is a sect of money managers that elected to cut their positions entirely by the end of the third quarter. It’s worth mentioning that Michael Platt and William Reeves’s BlueCrest Capital Mgmt. said goodbye to the largest investment of the “upper crust” of funds tracked by Insider Monkey, totaling close to $10.4 million in stock, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners was right behind this move, as the fund dropped about $2 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 1 funds by the end of the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as New Frontier Corp (NYSE:NFC) but similarly valued. These stocks are DryShips Inc. (NASDAQ:DRYS), GenMark Diagnostics, Inc (NASDAQ:GNMK), Avalon GloboCare Corp. (NASDAQ:AVCO), and Agenus Inc (NASDAQ:AGEN). This group of stocks’ market valuations match NFC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DRYS | 3 | 171 | 2 |
| GNMK | 14 | 76000 | 2 |
| AVCO | 3 | 1423 | 2 |
| AGEN | 7 | 13653 | 0 |
| Average | 6.75 | 22812 | 1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.75 hedge funds with bullish positions and the average amount invested in these stocks was $23 million. That figure was $65 million in NFC’s case. GenMark Diagnostics, Inc (NASDAQ:GNMK) is the most popular stock in this table. On the other hand DryShips Inc. (NASDAQ:DRYS) is the least popular one with only 3 bullish hedge fund positions. New Frontier Corp (NYSE:NFC) 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 NFC wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on NFC were disappointed as the stock returned 2.2% 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.
