The worries about the election and the ongoing uncertainty about the path of interest-rate increases have been keeping investors on the sidelines. Of course, most hedge funds and other asset managers have been underperforming main stock market indices since the middle of 2015. Interestingly though, smaller-cap stocks registered their best performance relative to the large-capitalization stocks since the end of the June quarter, suggesting that this may be the best time to take a cue from their stock picks. In fact, the Russell 2000 Index gained more than 15% since the beginning of the third quarter, while the Standard and Poor’s 500 benchmark returned less than 6%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Nielsen Hldg NV (NYSE:NLSN).
Nielsen Hldg NV (NYSE:NLSN) has experienced a decrease in hedge fund sentiment of late. NLSN was in 26 hedge funds’ portfolios at the end of the third quarter of 2016. There were 29 hedge funds in our database with NLSN holdings at the end of the previous quarter. At the end of this article we will also compare NLSN to other stocks including Vornado Realty Trust (NYSE:VNO), Johnson Controls, Inc. (NYSE:JCI), and Wisconsin Energy Corporation (NYSE:WEC) to get a better sense of its popularity.
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We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
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How have hedgies been trading Nielsen Hldg NV (NYSE:NLSN)?
At the end of the third quarter, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 10% dip from the second quarter of 2016. On the other hand, there were a total of 23 hedge funds with a bullish position in NLSN at the beginning of this year, so hedge fund sentiment is still positive for the year. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Kerr Neilson’s Platinum Asset Management has the most valuable position in Nielsen Hldg NV (NYSE:NLSN), worth close to $154 million, accounting for 3.6% of its total 13F portfolio. On Platinum Asset Management’s heels is Tetrem Capital Management, led by Daniel Bubis, holding a $38 million position; 1.4% of its 13F portfolio is allocated to the company. Some other peers that are bullish comprise James Parsons’ Junto Capital Management, Andrew Sandler’s Sandler Capital Management, and Lee Hicks and Jan Koerner’s Park Presidio Capital. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
We already know that not all hedge funds are bullish on the stock and some hedge funds actually said goodbye to their positions entirely. Intriguingly, Phill Gross and Robert Atchinson’s Adage Capital Management said goodbye to the largest stake of the “upper crust” of funds tracked by Insider Monkey, valued at about $28 million in stock, and Michael Messner’s Seminole Capital (Investment Mgmt) was right behind this move, as the fund said goodbye to about $8.6 million worth of shares.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Nielsen Hldg NV (NYSE:NLSN) but similarly valued. We will take a look at Vornado Realty Trust (NYSE:VNO), Johnson Controls, Inc. (NYSE:JCI), Wisconsin Energy Corporation (NYSE:WEC), and Dollar Tree, Inc. (NASDAQ:DLTR). This group of stocks’ market caps are similar to NLSN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VNO | 24 | 264017 | 2 |
| JCI | 55 | 2833460 | 23 |
| WEC | 20 | 101872 | 7 |
| DLTR | 63 | 3990852 | -1 |
As you can see these stocks had an average of 41 hedge funds with bullish positions and the average amount invested in these stocks was $1.80 billion. That figure was $436 million in NLSN’s case. Dollar Tree, Inc. (NASDAQ:DLTR) is the most popular stock in this table. On the other hand Wisconsin Energy Corporation (NYSE:WEC) is the least popular one with only 20 bullish hedge fund positions. Nielsen Hldg NV (NYSE:NLSN) 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 DLTR might be a better candidate to consider taking a long position in.
Disclosure: None
