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 NICE Ltd. (NASDAQ:NICE).
NICE Ltd. (NASDAQ:NICE) has experienced an increase in enthusiasm from smart money in recent months. NICE was in 17 hedge funds’ portfolios at the end of March. There were 15 hedge funds in our database with NICE positions at the end of the previous quarter. Our calculations also showed that nice 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.
We’re going to take a gander at the recent hedge fund action surrounding NICE Ltd. (NASDAQ:NICE).
How are hedge funds trading NICE Ltd. (NASDAQ:NICE)?
Heading into the second quarter of 2019, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from the fourth quarter of 2018. The graph below displays the number of hedge funds with bullish position in NICE over the last 15 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in NICE Ltd. (NASDAQ:NICE) was held by RGM Capital, which reported holding $86.9 million worth of stock at the end of March. It was followed by Arrowstreet Capital with a $73.2 million position. Other investors bullish on the company included Arrowgrass Capital Partners, Renaissance Technologies, and Fisher Asset Management.
As one would reasonably expect, some big names have been driving this bullishness. Driehaus Capital, managed by Richard Driehaus, created the most valuable position in NICE Ltd. (NASDAQ:NICE). Driehaus Capital had $6.7 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $3.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Mike Vranos’s Ellington, Michael Platt and William Reeves’s BlueCrest Capital Mgmt., and Bruce Kovner’s Caxton Associates LP.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as NICE Ltd. (NASDAQ:NICE) but similarly valued. We will take a look at SL Green Realty Corp (NYSE:SLG), Amdocs Limited (NASDAQ:DOX), Bio-Techne Corporation (NASDAQ:TECH), and Bunge Limited (NYSE:BG). All of these stocks’ market caps resemble NICE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SLG | 19 | 214863 | -3 |
| DOX | 26 | 619930 | 2 |
| TECH | 18 | 380876 | 1 |
| BG | 35 | 687417 | -3 |
| Average | 24.5 | 475772 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.5 hedge funds with bullish positions and the average amount invested in these stocks was $476 million. That figure was $236 million in NICE’s case. Bunge Limited (NYSE:BG) is the most popular stock in this table. On the other hand Bio-Techne Corporation (NASDAQ:TECH) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks NICE Ltd. (NASDAQ:NICE) is even less popular than TECH. Hedge funds clearly dropped the ball on NICE as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. 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. A small number of hedge funds were also right about betting on NICE as the stock returned 13% during the same period and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
