Is NAV Stock A Buy or Sell?

At Insider Monkey, we pore over the filings of nearly 887 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of December 31st. In this article, we will use that wealth of knowledge to determine whether or not Navistar International Corp (NYSE:NAV) makes for a good investment right now.

Is NAV stock a buy? Hedge funds were selling. The number of bullish hedge fund positions dropped by 14 in recent months. Navistar International Corp (NYSE:NAV) was in 29 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 43. Our calculations also showed that NAV isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 43 hedge funds in our database with NAV holdings at the end of September.

Mark Rachesky of MHR Fund Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now 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. Keeping this in mind we’re going to go over the recent hedge fund action regarding Navistar International Corp (NYSE:NAV).

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

At the end of the fourth quarter, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -33% from the previous quarter. By comparison, 27 hedge funds held shares or bullish call options in NAV a year ago. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Icahn Capital LP, managed by Carl Icahn, holds the largest position in Navistar International Corp (NYSE:NAV). Icahn Capital LP has a $735.4 million position in the stock, comprising 3.7% of its 13F portfolio. Sitting at the No. 2 spot is MHR Fund Management, managed by Mark Rachesky, which holds a $713.3 million position; the fund has 54.5% of its 13F portfolio invested in the stock. Some other members of the smart money that are bullish include Mario Gabelli’s GAMCO Investors, Alec Litowitz and Ross Laser’s Magnetar Capital and Renaissance Technologies. In terms of the portfolio weights assigned to each position MHR Fund Management allocated the biggest weight to Navistar International Corp (NYSE:NAV), around 54.54% of its 13F portfolio. Omni Partners is also relatively very bullish on the stock, earmarking 5.44 percent of its 13F equity portfolio to NAV.

Since Navistar International Corp (NYSE:NAV) has witnessed a decline in interest from the entirety of the hedge funds we track, we can see that there exists a select few hedge funds that elected to cut their entire stakes by the end of the fourth quarter. It’s worth mentioning that Mario Gabelli’s GAMCO Investors dumped the biggest investment of all the hedgies followed by Insider Monkey, worth about $151.9 million in stock, and Carl Tiedemann and Michael Tiedemann’s TIG Advisors was right behind this move, as the fund said goodbye to about $84.9 million worth. These transactions are interesting, as total hedge fund interest fell by 14 funds by the end of the fourth quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Navistar International Corp (NYSE:NAV) but similarly valued. These stocks are J2 Global Inc (NASDAQ:JCOM), Editas Medicine, Inc. (NASDAQ:EDIT), Grand Canyon Education Inc (NASDAQ:LOPE), SunPower Corporation (NASDAQ:SPWR), NewMarket Corporation (NYSE:NEU), BigCommerce Holdings, Inc. (NASDAQ:BIGC), and Datto Holding Corp. (NYSE:MSP). This group of stocks’ market valuations are similar to NAV’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 21.3 hedge funds with bullish positions and the average amount invested in these stocks was $803 million. That figure was $2133 million in NAV’s case. Grand Canyon Education Inc (NASDAQ:LOPE) is the most popular stock in this table. On the other hand NewMarket Corporation (NYSE:NEU) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Navistar International Corp (NYSE:NAV) is more popular among hedge funds. Our overall hedge fund sentiment score for NAV is 61.2. 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. 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 12.2% in 2021 through April 12th and still beat the market by 1.5 percentage points. Unfortunately NAV wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on NAV were disappointed as the stock returned 0.5% since the end of the fourth quarter (through 4/12) 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 most of these stocks already outperformed the market since 2019.

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