Concerns over a shift in Fed’s easy monetary policy have hit several hedge funds hard during the third quarter. A number of sectors are in correction territory. More importantly, Russell 2000 ETF (IWM) underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points between June 25, 2015 and October 30, 2015. Hedge funds and institutional investors tracked by Insider Monkey usually invest a disproportionate amount of their portfolios in smaller cap stocks. We have been receiving indications that hedge funds were paring back their overall exposure and this is one of the factors behind the recent movements in major indices. In this article, we will take a closer look at hedge fund sentiment towards Neff Corp (NYSE:NEFF).
Neff Corp (NYSE:NEFF) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 5 hedge funds’ portfolios at the end of September. At the end of this article we will also compare NEFF to other stocks including Luby’s, Inc. (NYSE:LUB), Westfield Financial, Inc. (NASDAQ:WFD), and Spartan Motors Inc (NASDAQ:SPAR) to get a better sense of its popularity.
Follow Neff Corp (NYSE:NEFF)
Follow Neff Corp (NYSE:NEFF)
To the average investor there are numerous methods market participants have at their disposal to grade publicly traded companies. Two of the most underrated methods are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the best picks of the top money managers can outclass the S&P 500 by a solid amount (see the details here).
Keeping this in mind, let’s take a gander at the key action regarding Neff Corp (NYSE:NEFF).
How are hedge funds trading Neff Corp (NYSE:NEFF)?
Of the funds tracked by Insider Monkey, Buckingham Capital Management, managed by David Keidan, holds the biggest position in Neff Corp (NYSE:NEFF). Buckingham Capital Management has a $5.2 million position in the stock, comprising 0.5% of its 13F portfolio. Coming in second is ZWEIG DIMENNA PARTNERS, led by Joe DiMenna, holding a $1.9 million position; 0.1% of its 13F portfolio is allocated to the company. Other professional money managers that hold long positions encompass Glenn Russell Dubin’s Highbridge Capital Management, Jonathan Lennon’s Pleasant Lake Partners and Ken Griffin’s Citadel Investment Group.
Interestingly, Alec Litowitz and Ross Laser’s Magnetar Capital said goodbye to the biggest stake of the 700 funds watched by Insider Monkey, comprising close to $5 million in stock, and Leon Cooperman’s Omega Advisors was right behind this move, as the fund dropped about $2.5 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s also examine hedge fund activity in other stocks similar to Neff Corp (NYSE:NEFF). These stocks are Luby’s, Inc. (NYSE:LUB), Westfield Financial, Inc. (NASDAQ:WFD), Spartan Motors Inc (NASDAQ:SPAR), and City Office REIT Inc (NYSE:CIO). This group of stocks’ market values resemble NEFF’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LUB | 4 | 12139 | -1 |
| WFD | 5 | 20206 | -1 |
| SPAR | 8 | 24868 | -1 |
| CIO | 5 | 6784 | 1 |
As you can see these stocks had an average of 5.5 hedge funds with bullish positions and the average amount invested in these stocks was $16 million. That figure was $9 million in NEFF’s case. Spartan Motors Inc (NASDAQ:SPAR) is the most popular stock in this table. On the other hand Luby’s, Inc. (NYSE:LUB) is the least popular one with only 4 bullish hedge fund positions. Neff Corp (NYSE:NEFF) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SPAR might be a better candidate to consider a long position.
