We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Ackman’s recent Valeant losses). However, it is still good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Nimble Storage Inc (NYSE:NMBL).
Nimble Storage Inc investors should be aware of a decrease in hedge fund interest lately. NMBL was in 18 hedge funds’ portfolios at the end of the third quarter of 2015. There were 19 hedge funds in our database with NMBL holdings at the end of the previous quarter. 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 RPC, Inc. (NYSE:RES), Crown Media Holdings, Inc (NASDAQ:CRWN), and Novavax, Inc. (NASDAQ:NVAX) to gather more data points.
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Keeping this in mind, we’re going to take a look at the fresh action encompassing Nimble Storage Inc (NYSE:NMBL).
What have hedge funds been doing with Nimble Storage Inc (NYSE:NMBL)?
At Q3’s end, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -5% from the second quarter. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Tremblant Capital, managed by Brett Barakett, holds the largest position in Nimble Storage Inc (NYSE:NMBL). Tremblant Capital has a $51.5 million position in the stock, comprising 3.3% of its 13F portfolio. The second most bullish fund is Polar Capital with a $25.2 million position; 0.5% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that hold long positions encompass Noam Gottesman’s GLG Partners, Crispin Odey’s Odey Asset Management Group and Jim Simons’s Renaissance Technologies.
Because Nimble Storage Inc (NYSE:NMBL) has witnessed declining sentiment from the entirety of the hedge funds we track, we can see that there is a sect of money managers that slashed their entire stakes last quarter. At the top of the heap, Brett Barakett’s Tremblant Capital sold off the biggest position of all the hedgies watched by Insider Monkey, totaling about $8.3 million in call options. Peter Muller’s fund, PDT Partners, also said goodbye to its stock, about $3.2 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds last quarter.
Let’s check out hedge fund activity in other stocks similar to Nimble Storage Inc (NYSE:NMBL). We will take a look at RPC, Inc. (NYSE:RES), Crown Media Holdings, Inc (NASDAQ:CRWN), Novavax, Inc. (NASDAQ:NVAX), and The Ryland Group, Inc. (NYSE:RYL). This group of stocks’ market caps are closest to NMBL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RES | 17 | 125269 | -2 |
| CRWN | 8 | 18037 | 0 |
| NVAX | 24 | 100942 | 7 |
| RYL | 23 | 535177 | -5 |
As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $195 million. That figure was $152 million in NMBL’s case. Novavax, Inc. (NASDAQ:NVAX) is the most popular stock in this table. On the other hand Crown Media Holdings, Inc (NASDAQ:CRWN) is the least popular one with only 8 bullish hedge fund positions. Nimble Storage Inc (NYSE:NMBL) 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 NVAX might be a better candidate to consider a long position.
