Is New Senior Investment Group Inc (NYSE:SNR) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
New Senior Investment Group Inc (NYSE:SNR) shareholders have witnessed a decrease in hedge fund interest lately. Our calculations also showed that snr isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s take a peek at the fresh hedge fund action regarding New Senior Investment Group Inc (NYSE:SNR).
Hedge fund activity in New Senior Investment Group Inc (NYSE:SNR)
At Q1’s end, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from the fourth quarter of 2018. The graph below displays the number of hedge funds with bullish position in SNR over the last 15 quarters. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
The largest stake in New Senior Investment Group Inc (NYSE:SNR) was held by Renaissance Technologies, which reported holding $33.5 million worth of stock at the end of March. It was followed by Omega Advisors with a $23.2 million position. Other investors bullish on the company included Citadel Investment Group, Millennium Management, and Arrowstreet Capital.
Because New Senior Investment Group Inc (NYSE:SNR) has witnessed declining sentiment from the aggregate hedge fund industry, logic holds that there were a few hedge funds that elected to cut their full holdings by the end of the third quarter. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management sold off the largest position of the “upper crust” of funds tracked by Insider Monkey, comprising close to $3.4 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace LLP was right behind this move, as the fund said goodbye to about $2.8 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 1 funds by the end of the third quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as New Senior Investment Group Inc (NYSE:SNR) but similarly valued. We will take a look at Blue Bird Corporation (NASDAQ:BLBD), AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG), Sierra Wireless, Inc. (NASDAQ:SWIR), and B. Riley Financial, Inc. (NASDAQ:RILY). All of these stocks’ market caps match SNR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BLBD | 6 | 69077 | -1 |
| AMAG | 19 | 186207 | -4 |
| SWIR | 12 | 50988 | 2 |
| RILY | 10 | 84819 | 0 |
| Average | 11.75 | 97773 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.75 hedge funds with bullish positions and the average amount invested in these stocks was $98 million. That figure was $67 million in SNR’s case. AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) is the most popular stock in this table. On the other hand Blue Bird Corporation (NASDAQ:BLBD) is the least popular one with only 6 bullish hedge fund positions. New Senior Investment Group Inc (NYSE:SNR) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Hedge funds were also right about betting on SNR as the stock returned 18.7% during the same period and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
