Is NQ Mobile Inc (ADR) (NYSE:NQ) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before doing days of research on it. Given their 2 and 20 payment structure, hedge funds have more resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is NQ Mobile Inc (ADR) (NYSE:NQ) going to take off soon? Prominent investors are taking a pessimistic view. The number of bullish hedge fund positions retreated by 3 recently. 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 Federal Agricultural Mortgage Corp. (NYSE:AGM), Exar Corporation (NASDAQ:EXAR), and Aerohive Networks Inc (NYSE:HIVE) to gather more data points.
With all of this in mind, we’re going to take a gander at the new action surrounding NQ Mobile Inc (ADR) (NYSE:NQ).
Hedge fund activity in NQ Mobile Inc (ADR) (NYSE:NQ)
At the end of the third quarter, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -27% from the second quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Kenneth Tropin’s Graham Capital Management has the number one position in NQ Mobile Inc (ADR) (NYSE:NQ), worth close to $3.7 million, accounting for 0.4% of its total 13F portfolio. Sitting at the No. 2 spot is Sound Energy Partners, led by Anthony Giammalva, holding a $1.7 million position; the fund has 3.3% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism comprise Peter A. Wright’s P.A.W. CAPITAL PARTNERS, Ken Griffin’s Citadel Investment Group and Israel Englander’s Millennium Management.
Judging by the fact that NQ Mobile Inc (ADR) (NYSE:NQ) has faced falling interest from the smart money, logic holds that there was a specific group of money managers that slashed their full holdings in the third quarter. Intriguingly, Christopher R. Hansen’s Valiant Capital cut the largest position of the “upper crust” of funds monitored by Insider Monkey, valued at about $14.2 million in stock. Rob Romero’s fund, Connective Capital Management, also dropped its stock, about $1.9 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 3 funds in the third quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as NQ Mobile Inc (ADR) (NYSE:NQ) but similarly valued. We will take a look at Federal Agricultural Mortgage Corp. (NYSE:AGM), Exar Corporation (NASDAQ:EXAR), Aerohive Networks Inc (NYSE:HIVE), and Genco Shipping & Trading Limited (NYSE:GNK). This group of stocks’ market caps match NQ’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AGM | 6 | 7167 | -1 |
| EXAR | 12 | 51749 | -5 |
| HIVE | 7 | 29488 | -1 |
| GNK | 10 | 106210 | 10 |
As you can see these stocks had an average of 8.75 hedge funds with bullish positions and the average amount invested in these stocks was $49 million. That figure was $8 million in NQ’s case. Exar Corporation (NASDAQ:EXAR) is the most popular stock in this table. On the other hand Federal Agricultural Mortgage Corp. (NYSE:AGM) is the least popular one with only 6 bullish hedge fund positions. NQ Mobile Inc (ADR) (NYSE:NQ) 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 EXAR might be a better candidate to consider a long position.
