Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the second quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Newmark Group, Inc. (NASDAQ:NMRK) based on that data.
Hedge fund interest in Newmark Group, Inc. (NASDAQ:NMRK) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that NMRK isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). 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 HeadHunter Group PLC (NASDAQ:HHR), Danimer Scientific, Inc. (NYSE:DNMR), and Talend S.A. (NASDAQ:TLND) to gather more data points.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Keeping this in mind let’s go over the new hedge fund action regarding Newmark Group, Inc. (NASDAQ:NMRK).
Do Hedge Funds Think NMRK Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 24 hedge funds with a bullish position in NMRK a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Cardinal Capital held the most valuable stake in Newmark Group, Inc. (NASDAQ:NMRK), which was worth $75.2 million at the end of the second quarter. On the second spot was Empyrean Capital Partners which amassed $57.3 million worth of shares. Paulson & Co, Arrowstreet Capital, and Birch Run Capital 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 Birch Run Capital allocated the biggest weight to Newmark Group, Inc. (NASDAQ:NMRK), around 8.68% of its 13F portfolio. Cardinal Capital is also relatively very bullish on the stock, dishing out 1.8 percent of its 13F equity portfolio to NMRK.
Since Newmark Group, Inc. (NASDAQ:NMRK) has experienced declining sentiment from the smart money, it’s safe to say that there lies a certain “tier” of hedgies that elected to cut their full holdings last quarter. Interestingly, Dmitry Balyasny’s Balyasny Asset Management said goodbye to the largest investment of the 750 funds monitored by Insider Monkey, worth an estimated $7.4 million in stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund dropped about $3.2 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Newmark Group, Inc. (NASDAQ:NMRK) but similarly valued. We will take a look at HeadHunter Group PLC (NASDAQ:HHR), Danimer Scientific, Inc. (NYSE:DNMR), Talend S.A. (NASDAQ:TLND), Sykes Enterprises, Incorporated (NASDAQ:SYKE), Xenia Hotels & Resorts Inc (NYSE:XHR), Quanterix Corporation (NASDAQ:QTRX), and Organogenesis Holdings Inc. (NASDAQ:ORGO). This group of stocks’ market values resemble NMRK’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HHR | 14 | 38174 | 7 |
| DNMR | 30 | 309530 | 0 |
| TLND | 36 | 1058430 | -9 |
| SYKE | 19 | 245998 | 5 |
| XHR | 5 | 8153 | -1 |
| QTRX | 20 | 280102 | 1 |
| ORGO | 16 | 205787 | 4 |
| Average | 20 | 306596 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $307 million. That figure was $218 million in NMRK’s case. Talend S.A. (NASDAQ:TLND) is the most popular stock in this table. On the other hand Xenia Hotels & Resorts Inc (NYSE:XHR) is the least popular one with only 5 bullish hedge fund positions. Newmark Group, Inc. (NASDAQ:NMRK) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NMRK is 57.1. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on NMRK as the stock returned 24.9% since the end of Q2 (through 10/22) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
