Nomura Holdings, Inc. (NYSE:NMR) investors should be aware of an increase in enthusiasm from smart money lately. NMR was in 5 hedge funds’ portfolios at the end of December. There were 2 hedge funds in our database with NMR holdings at the end of the previous quarter. Our calculations also showed that NMR 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 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 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.
Let’s take a look at the recent hedge fund action surrounding Nomura Holdings, Inc. (NYSE:NMR).
How are hedge funds trading Nomura Holdings, Inc. (NYSE:NMR)?
At the end of the fourth quarter, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 150% from one quarter earlier. By comparison, 4 hedge funds held shares or bullish call options in NMR 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.
Among these funds, Fisher Asset Management held the most valuable stake in Nomura Holdings, Inc. (NYSE:NMR), which was worth $26.6 million at the end of the third quarter. On the second spot was LMR Partners which amassed $6.1 million worth of shares. Moreover, D E Shaw, Citadel Investment Group, and Two Sigma Advisors were also bullish on Nomura Holdings, Inc. (NYSE:NMR), allocating a large percentage of their portfolios to this stock.
Now, key hedge funds have been driving this bullishness. LMR Partners, managed by Ben Levine, Andrew Manuel and Stefan Renold, established the biggest position in Nomura Holdings, Inc. (NYSE:NMR). LMR Partners had $6.1 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.2 million position during the quarter. The only other fund with a brand new NMR position is John Overdeck and David Siegel’s Two Sigma Advisors.
Let’s go over hedge fund activity in other stocks similar to Nomura Holdings, Inc. (NYSE:NMR). These stocks are Host Hotels and Resorts Inc (NYSE:HST), PG&E Corporation (NYSE:PCG), CoStar Group Inc (NASDAQ:CSGP), and Cadence Design Systems Inc (NASDAQ:CDNS). This group of stocks’ market caps are similar to NMR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HST | 22 | 328825 | 1 |
| PCG | 58 | 2496519 | -2 |
| CSGP | 23 | 753921 | -6 |
| CDNS | 29 | 1178250 | -3 |
| Average | 33 | 1189379 | -2.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 33 hedge funds with bullish positions and the average amount invested in these stocks was $1189 million. That figure was $37 million in NMR’s case. PG&E Corporation (NYSE:PCG) is the most popular stock in this table. On the other hand Host Hotels and Resorts Inc (NYSE:HST) is the least popular one with only 22 bullish hedge fund positions. Compared to these stocks Nomura Holdings, Inc. (NYSE:NMR) is even less popular than HST. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. Our calculations showed that top 15 most popular stocks among hedge funds returned 19.7% through March 15th and outperformed the S&P 500 ETF (SPY) by 6.6 percentage points. Unfortunately NMR wasn’t in this group. Hedge funds that bet on NMR were disappointed as the stock lost .8% and underperformed the market. If you are interested in investing in large cap stocks, you should check out the top 15 hedge fund stocks as 13 of these outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.
