Is EYE Stock A Buy or Sell?

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is National Vision Holdings, Inc. (NASDAQ:EYE), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Is EYE stock a buy? National Vision Holdings, Inc. (NASDAQ:EYE) investors should be aware of an increase in activity from the world’s largest hedge funds recently. National Vision Holdings, Inc. (NASDAQ:EYE) was in 24 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 25. Our calculations also showed that EYE isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Robert Atchinson of Adage Capital Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind we’re going to take a look at the latest hedge fund action regarding National Vision Holdings, Inc. (NASDAQ:EYE).

Do Hedge Funds Think EYE Is A Good Stock To Buy Now?

At Q4’s end, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of 33% from the third quarter of 2020. On the other hand, there were a total of 15 hedge funds with a bullish position in EYE a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Adage Capital Management was the largest shareholder of National Vision Holdings, Inc. (NASDAQ:EYE), with a stake worth $356.3 million reported as of the end of December. Trailing Adage Capital Management was Columbus Circle Investors, which amassed a stake valued at $15.5 million. D E Shaw, Millennium Management, and Impax Asset Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Adage Capital Management allocated the biggest weight to National Vision Holdings, Inc. (NASDAQ:EYE), around 0.78% of its 13F portfolio. Columbus Circle Investors is also relatively very bullish on the stock, dishing out 0.68 percent of its 13F equity portfolio to EYE.

As one would reasonably expect, some big names were leading the bulls’ herd. Renaissance Technologies, established the biggest position in National Vision Holdings, Inc. (NASDAQ:EYE). Renaissance Technologies had $5.1 million invested in the company at the end of the quarter. Richard Driehaus’s Driehaus Capital also initiated a $4.4 million position during the quarter. The following funds were also among the new EYE investors: Paul Marshall and Ian Wace’s Marshall Wace LLP, Minhua Zhang’s Weld Capital Management, and Greg Eisner’s Engineers Gate Manager.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as National Vision Holdings, Inc. (NASDAQ:EYE) but similarly valued. These stocks are Diodes Incorporated (NASDAQ:DIOD), Parsons Corporation (NYSE:PSN), Coherent, Inc. (NASDAQ:COHR), 8×8, Inc. (NASDAQ:EGHT), Amkor Technology, Inc. (NASDAQ:AMKR), Hudson Pacific Properties Inc (NYSE:HPP), and STAAR Surgical Company (NASDAQ:STAA). This group of stocks’ market valuations are closest to EYE’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 20.4 hedge funds with bullish positions and the average amount invested in these stocks was $446 million. That figure was $426 million in EYE’s case. 8×8, Inc. (NASDAQ:EGHT) is the most popular stock in this table. On the other hand Diodes Incorporated (NASDAQ:DIOD) is the least popular one with only 14 bullish hedge fund positions. National Vision Holdings, Inc. (NASDAQ:EYE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for EYE is 80.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and beat the market again by 0.9 percentage points. Unfortunately EYE wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on EYE were disappointed as the stock returned 6.1% since the end of December (through 4/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.

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