There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other successful funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze New York & Company, Inc. (NYSE:NWY).
Is New York & Company, Inc. (NYSE:NWY) a buy, sell, or hold? The smart money is altogether getting less bullish. The number of long hedge fund positions dropped by 1 in recent months. In this way, there were 9 hedge funds in our database with NWY positions at the end of the third quarter. At the end of this article we will also compare NWY to other stocks including Radio One, Inc. (NASDAQ:ROIAK), Ocean Shore Holding Co (NASDAQ:OSHC), and Kopin Corporation (NASDAQ:KOPN) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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What have hedge funds been doing with New York & Company, Inc. (NYSE:NWY)?
Heading into the fourth quarter of 2016, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, down by 10% from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards NWY over the last 5 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Thomas Ellis and Todd Hammer of North Run Capital holds the biggest position in New York & Company, Inc. (NYSE:NWY). North Run Capital has a $9 million position in the stock, comprising 1.4% of its 13F portfolio. Coming in second is Brett Hendrickson of Nokomis Capital, with a $2.3 million position. Remaining hedge funds and institutional investors that are bullish encompass Jim Simons’ Renaissance Technologies, one of the largest hedge funds in the world, Chuck Royce’s Royce & Associates and Mark Coe’s Coe Capital Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Seeing as New York & Company, Inc. (NYSE:NWY) has gone through a decline in interest from the smart money, we can see that there exists a select few money managers that slashed their positions entirely by the end of the third quarter. Interestingly, Mark N. Diker’s Diker Management sold off the biggest position of all the hedgies followed by Insider Monkey, totaling about $0.3 million in stock, and Israel Englander’s Millennium Management was right behind this move, as the fund dropped about $0.1 million worth of shares.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as New York & Company, Inc. (NYSE:NWY) but similarly valued. These stocks are Radio One, Inc. (NASDAQ:ROIAK), Ocean Shore Holding Co (NASDAQ:OSHC), Kopin Corporation (NASDAQ:KOPN), and BioDelivery Sciences International, Inc. (NASDAQ:BDSI). All of these stocks’ market caps resemble NWY’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ROIAK | 4 | 16371 | -2 |
| OSHC | 3 | 4213 | -3 |
| KOPN | 2 | 5352 | -2 |
| BDSI | 11 | 34853 | -3 |
As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $15 million. That figure was $16 million in NWY’s case. BioDelivery Sciences International, Inc. (NASDAQ:BDSI) is the most popular stock in this table. On the other hand Kopin Corporation (NASDAQ:KOPN) is the least popular one with only 2 bullish hedge fund positions. New York & Company, Inc. (NYSE:NWY) 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. In this regard BDSI might be a better candidate to consider taking a long position in.
Disclosure: None
