Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
Nam Tai Property Inc (NYSE:NTP) has experienced an increase in hedge fund interest in recent months. NTP was in 6 hedge funds’ portfolios at the end of September. There were 4 hedge funds in our database with NTP holdings at the end of the previous quarter. At the end of this article we will also compare NTP to other stocks including Digi International Inc. (NASDAQ:DGII), Paratek Pharmaceuticals Inc (NASDAQ:PRTK), and MannKind Corporation (NASDAQ:MNKD) to get a better sense of its popularity.
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.
Sergiy Zavgorodny/Shutterstock.com
With all of this in mind, let’s review the latest action encompassing Nam Tai Property Inc (NYSE:NTP).
How are hedge funds trading Nam Tai Property Inc (NYSE:NTP)?
At Q3’s end, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of 50% from one quarter earlier. By comparison, 4 hedge funds held shares or bullish call options in NTP heading into this year. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Irving Kahn’s Kahn Brothers has the most valuable position in Nam Tai Property Inc (NYSE:NTP), worth close to $25.8 million, corresponding to 4.7% of its total 13F portfolio. The second largest stake is held by Renaissance Technologies, led by Jim Simons, which holds a $2.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other members of the smart money with similar optimism include David Iben’s Kopernik Global Investors, Phil Frohlich’s Prescott Group Capital Management and Israel Englander’s Millennium Management. We should note that Kopernik Global Investors is 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.
As aggregate interest increased, key money managers were breaking ground themselves. Prescott Group Capital Management, led by Phil Frohlich, initiated the most outsized position in Nam Tai Property Inc (NYSE:NTP). Prescott Group Capital Management had $0.4 million invested in the company at the end of the quarter. Millennium Management , one of the 10 largest hedge funds in the world, also initiated a $0.2 million position during the quarter. The other funds with new positions in the stock are Matthew Hulsizer’s PEAK6 Capital Management and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s go over hedge fund activity in other stocks similar to Nam Tai Property Inc (NYSE:NTP). We will take a look at Digi International Inc. (NASDAQ:DGII), Paratek Pharmaceuticals Inc (NASDAQ:PRTK), MannKind Corporation (NASDAQ:MNKD), and IntelSat SA (NYSE:I). This group of stocks’ market caps resemble NTP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DGII | 15 | 21063 | -1 |
| PRTK | 17 | 63710 | -4 |
| MNKD | 7 | 5336 | 1 |
| I | 15 | 92302 | 1 |
As you can see these stocks had an average of 13.5 hedge funds with bullish positions and the average amount invested in these stocks was $46 million. That figure was $30 million in NTP’s case. Paratek Pharmaceuticals Inc (NASDAQ:PRTK) is the most popular stock in this table. On the other hand MannKind Corporation (NASDAQ:MNKD) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Nam Tai Property Inc (NYSE:NTP) is even less popular than MNKD. 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. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
Suggested Articles:
Most Profitable Cash Only Businesses
Best Selling Products Of All Time
Best Places To Visit In Thailand For Kids and Families
Disclosure: None