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 New Mountain Finance Corp. (NYSE:NMFC) .
Is New Mountain Finance Corp. (NYSE:NMFC) a buy here? The best stock pickers are definitely becoming more confident. The number of long hedge fund positions experienced an increase of 1 recently. There were 11 hedge funds in our database with NMFC positions at the end of September. 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 Hibbett Sports, Inc. (NASDAQ:HIBB), NutriSystem Inc. (NASDAQ:NTRI), and Lydall, Inc. (NYSE:LDL) to gather more data points.
Follow New Mountain Finance Corp (NYSE:NMFC)
Follow New Mountain Finance Corp (NYSE:NMFC)
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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With all of this in mind, let’s review the recent action regarding New Mountain Finance Corp. (NYSE:NMFC).
What does the smart money think about New Mountain Finance Corp. (NYSE:NMFC)?
At Q3’s end, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 10% from the previous quarter. On the other hand, there were a total of 10 hedge funds with a bullish position in NMFC at the beginning of this year. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, McKinley Capital Management, led by Robert B. Gillam, holds the most valuable position in New Mountain Finance Corp. (NYSE:NMFC). McKinley Capital Management has a $3.1 million position in the stock, comprising 0.1% of its 13F portfolio. On McKinley Capital Management’s heels is Polar Capital, led by Brian Ashford-Russell and Tim Woolley, holding a $2 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Other professional money managers that are bullish include Millennium Management, one of the 10 largest hedge funds in the world, and Peter A. Wright’s P.A.W. CAPITAL PARTNERS. We should note that none of these elite funds are among our list of the 100 best performing elite funds which is based on the performance of their 13F long positions in non-microcap stocks.
As industrywide interest jumped, specific money managers were breaking ground themselves. Clough Capital Partners, led by Charles Clough, initiated the biggest position in New Mountain Finance Corp. (NYSE:NMFC). Clough Capital Partners had $1.9 million invested in the company at the end of the quarter. Robert Raiff’s Raiff Partners also initiated a $1.4 million position during the quarter. The only other fund with a new position in the stock is Peter Muller’s PDT Partners.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as New Mountain Finance Corp. (NYSE:NMFC) but similarly valued. We will take a look at Hibbett Sports, Inc. (NASDAQ:HIBB), NutriSystem Inc. (NASDAQ:NTRI), Lydall, Inc. (NYSE:LDL), and HealthStream, Inc. (NASDAQ:HSTM). This group of stocks’ market caps are similar to NMFC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HIBB | 9 | 21692 | -4 |
| NTRI | 19 | 152587 | -4 |
| LDL | 12 | 67062 | -1 |
| HSTM | 9 | 28378 | 0 |
As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $67 million. That figure was $15 million in NMFC’s case. NutriSystem Inc. (NASDAQ:NTRI) is the most popular stock in this table. On the other hand Hibbett Sports, Inc. (NASDAQ:HIBB) is the least popular one with only 9 bullish hedge fund positions. New Mountain Finance Corp. (NYSE:NMFC) 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 NTRI might be a better candidate to consider taking a long position in.
Disclosure: None
