In this article we will take a look at whether hedge funds think Norwegian Cruise Line Holdings Ltd (NASDAQ:NCLH) is 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, unconventional data sources, 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.
Is NCLH a good stock to buy? Norwegian Cruise Line Holdings Ltd (NASDAQ:NCLH) was in 34 hedge funds’ portfolios at the end of March. The all time high for this statistic is 42. NCLH has experienced a decrease in hedge fund interest in recent months. There were 40 hedge funds in our database with NCLH positions at the end of the fourth quarter. Our calculations also showed that NCLH isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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Bill Miller of Miller Value Partners
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Do Hedge Funds Think NCLH Is A Good Stock To Buy Now?
At first quarter’s end, a total of 34 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -15% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards NCLH over the last 23 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Norwegian Cruise Line Holdings Ltd (NASDAQ:NCLH) was held by Zimmer Partners, which reported holding $130.5 million worth of stock at the end of December. It was followed by Miller Value Partners with a $106.8 million position. Other investors bullish on the company included Citadel Investment Group, Alyeska Investment Group, and MIG Capital. In terms of the portfolio weights assigned to each position North Fourth Asset Management allocated the biggest weight to Norwegian Cruise Line Holdings Ltd (NASDAQ:NCLH), around 4.41% of its 13F portfolio. MIG Capital is also relatively very bullish on the stock, designating 4.17 percent of its 13F equity portfolio to NCLH.
Because Norwegian Cruise Line Holdings Ltd (NASDAQ:NCLH) has faced a decline in interest from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of hedgies that slashed their positions entirely in the first quarter. At the top of the heap, Principal Global Investors’s Columbus Circle Investors said goodbye to the largest investment of the 750 funds monitored by Insider Monkey, totaling close to $18.6 million in stock. Doug Gordon, Jon Hilsabeck and Don Jabro’s fund, Shellback Capital, also sold off its stock, about $8.3 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 6 funds in the first quarter.
Let’s go over hedge fund activity in other stocks similar to Norwegian Cruise Line Holdings Ltd (NASDAQ:NCLH). We will take a look at Hubbell Incorporated (NYSE:HUBB), The Western Union Company (NYSE:WU), Teck Resources Ltd (NYSE:TECK), Watsco Inc (NYSE:WSO), Cleveland-Cliffs Inc (NYSE:CLF), Dolby Laboratories, Inc. (NYSE:DLB), and Aegon N.V. (NYSE:AEG). This group of stocks’ market caps resemble NCLH’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HUBB | 15 | 421137 | -7 |
| WU | 28 | 410366 | -1 |
| TECK | 30 | 1071508 | -1 |
| WSO | 22 | 280163 | -2 |
| CLF | 36 | 968204 | 9 |
| DLB | 34 | 783499 | 3 |
| AEG | 6 | 26294 | 2 |
| Average | 24.4 | 565882 | 0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.4 hedge funds with bullish positions and the average amount invested in these stocks was $566 million. That figure was $576 million in NCLH’s case. Cleveland-Cliffs Inc (NYSE:CLF) is the most popular stock in this table. On the other hand Aegon N.V. (NYSE:AEG) is the least popular one with only 6 bullish hedge fund positions. Norwegian Cruise Line Holdings Ltd (NASDAQ:NCLH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NCLH is 70. 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 19.3% in 2021 through June 25th and still beat the market by 4.8 percentage points. Hedge funds were also right about betting on NCLH, though not to the same extent, as the stock returned 12.5% since Q1 (through June 25th) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.
