A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Noodles & Co (NASDAQ:NDLS).
Noodles & Co (NASDAQ:NDLS) has experienced an increase in activity from the world’s largest hedge funds lately. There were 4 hedge funds in our database with NDLS holdings at the end of the second quarter, which jumped to 6 by the end of the third quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Navios Maritime Holdings Inc. (NYSE:NM), Eagle Bulk Shipping Inc. (NASDAQ:EGLE), and Bio-Path Holdings Inc (NASDAQ:BPTH) to gather more data points.
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We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.
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What does the smart money think about Noodles & Co (NASDAQ:NDLS)?
At the end of the third quarter, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 50% surge from the previous quarter. Below, you can check out the change in hedge fund sentiment towards NDLS over the last 5 quarters, which fell heavily in Q4 2015 and has slowly rebounded since. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Mario Cibelli’s Marathon Partners has the number one position in Noodles & Co (NASDAQ:NDLS), worth close to $2.9 million, comprising 1.4% of its total 13F portfolio. Sitting at the No. 2 spot is Prospector Partners, led by John D. Gillespie, which holds a $1.4 million position. Other hedge funds and institutional investors that hold long positions include Jim Simons’ Renaissance Technologies, and D E Shaw, one of the biggest hedge funds in the world. 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-micro-cap stocks.
With general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Prospector Partners established the most valuable position in Noodles & Co (NASDAQ:NDLS). Renaissance Technologies also initiated a $0.8 million position during the quarter. The other funds with new positions in the stock were Ken Griffin’s Citadel Investment Group and John Overdeck and David Siegel’s Two Sigma Advisors.
Let’s now review hedge fund activity in other stocks similar to Noodles & Co (NASDAQ:NDLS). We will take a look at Navios Maritime Holdings Inc. (NYSE:NM), Eagle Bulk Shipping Inc. (NASDAQ:EGLE), Bio-Path Holdings Inc (NASDAQ:BPTH), and CardConnect Corp (NASDAQ:CCN). This group of stocks’ market caps resemble NDLS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NM | 5 | 6707 | -3 |
| EGLE | 4 | 11694 | 0 |
| BPTH | 1 | 1841 | -2 |
| CCN | 8 | 38777 | 8 |
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 $5 million in NDLS’s case. CardConnect Corp (NASDAQ:CCN) is the most popular stock in this table. On the other hand Bio-Path Holdings Inc (NASDAQ:BPTH) is the least popular one with only 1 bullish hedge fund positions. Noodles & Co (NASDAQ:NDLS) 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 CCN might be a better candidate to consider taking a long position in.
Disclosure: None
