Most investors tend to think that hedge funds and other asset managers are worthless, as they cannot beat even simple index fund portfolios. In fact, most people expect hedge funds to compete with and outperform the bull market that we have witnessed over the past few years. However, hedge funds are generally partially hedged and aim to deliver attractive risk-adjusted returns rather than following the ups-and-downs of equity markets hoping that they will outperform the broader market. Our research shows that hedge funds do have great stock picking skills, so let’s take a glance at the smart money sentiment towards Novadaq Technologies Inc. (NASDAQ:NVDQ).
Novadaq Technologies Inc. was in 9 hedge funds’ portfolios at the end of September. Novadaq Technologies Inc. has seen a decrease in hedge fund sentiment recently. There were 10 hedge funds in our database with Novadaq Technologies Inc. holdings at the end of the quarter prior to that. At the end of this article we will also compare Novadaq Technologies Inc. to other stocks including Monster Worldwide, Inc. (NYSE:MWW), Entravision Communication (NYSE:EVC), and National Presto Industries Inc. (NYSE:NPK) to get a better sense of its popularity.
In today’s marketplace there are a multitude of signals shareholders employ to size up their holdings. Some of the most useful signals are hedge fund and insider trading activity. our researchers have shown that, historically, those who follow the best picks of the best hedge fund managers can outpace the broader indices by a superb amount (see the details here).
Keeping this in mind, let’s analyze the recent action surrounding Novadaq Technologies Inc. (NASDAQ:NVDQ).
What have hedge funds been doing with Novadaq Technologies Inc. (NASDAQ:NVDQ)?
At Q3’s end, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a 10% dip from the previous quarter. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their holdings meaningfully (or had already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Broadfin Capital, managed by Kevin Kotler, holds the most valuable position in Novadaq Technologies Inc. (NASDAQ:NVDQ). Broadfin Capital has a $19.9 million position in the stock, comprising 1.1% of its 13F portfolio. On Broadfin Capital’s heels is Steve Cohen of Point72 Asset Management, with a $10.6 million position; the investor’s family office has 0.1% of its 13F portfolio invested in the stock. Some other peers with similar optimism comprise Kris Jenner, Gordon Bussard, and Graham McPhail’s Rock Springs Capital Management, and Chuck Royce’s Royce & Associates.
Seeing as Novadaq Technologies Inc. (NASDAQ:NVDQ) has experienced a declination in interest from the entirety of the hedge funds we track, logic holds that there is a sect of funds that elected to cut their positions entirely last quarter. Intriguingly, Stuart Weisbrod’s Iguana Healthcare Management sold off the biggest position of the “upper crust” of funds tracked by Insider Monkey, valued at about $0.6 million in call options underlying shares. Point72 Asset Management also said goodbye to its call options, about $0.3 million worth, though as mentioned, it still held a bullish long position. These transactions are interesting, as aggregate hedge fund interest dropped by 1 fund last quarter.
Let’s go over hedge fund activity in other stocks similar to Novadaq Technologies Inc. (NASDAQ:NVDQ). We will take a look at Monster Worldwide, Inc. (NYSE:MWW), Entravision Communication (NYSE:EVC), National Presto Industries Inc. (NYSE:NPK), and CalAmp Corp. (NASDAQ:CAMP). All of these stocks’ market caps are closest to NVDQ’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MWW | 31 | 98732 | 7 |
| EVC | 19 | 93740 | 1 |
| NPK | 11 | 78715 | 1 |
| CAMP | 14 | 32809 | -2 |
As you can see these stocks had an average of 18.75 hedge funds with bullish positions and the average amount invested in these stocks was $76 million. That figure was $47 million in Novadaq Technologies Inc.’s case. Monster Worldwide, Inc. (NYSE:MWW) is the most popular stock in this table. On the other hand National Presto Industries Inc. (NYSE:NPK) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Novadaq Technologies Inc. (NASDAQ:NVDQ) is even less popular than National Presto. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock and sentiment for it doesn’t seem to be going anywhere.
