Is NN, Inc. (NASDAQ:NNBR) 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, expert networks, and get tips from industry insiders. They fail miserably sometimes but historically their consensus stock picks outperformed the market after adjusting for known risk factors.
Is NN, Inc. (NASDAQ:NNBR) a sound investment now? Prominent investors are buying. The number of long hedge fund bets went up by 2 lately. 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 Double Eagle Acqusition Corp (NASDAQ:EAGL), Xencor Inc (NASDAQ:XNCR), and Carmike Cinemas, Inc. (NASDAQ:CKEC) to gather more data points.
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With all of this in mind, let’s take a look at the new action encompassing NN, Inc. (NASDAQ:NNBR).
How have hedgies been trading NN, Inc. (NASDAQ:NNBR)?
At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from the second quarter. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Chuck Royce’s Royce & Associates has the biggest position in NN, Inc. (NASDAQ:NNBR), worth close to $27.6 million, corresponding to 0.1% of its total 13F portfolio. Coming in second is Scopus Asset Management, managed by Alexander Mitchell, which holds a $8.1 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other professional money managers that hold long positions comprise Charles Paquelet’s Skylands Capital, Paul Hondros’s AlphaOne Capital Partners and Jeffrey Moskowitz’s Harvey Partners.
Now, some big names have jumped into NN, Inc. (NASDAQ:NNBR) headfirst. AlphaOne Capital Partners, managed by Paul Hondros, assembled the largest position in NN, Inc. (NASDAQ:NNBR). AlphaOne Capital Partners had $3.4 million invested in the company at the end of the quarter. Edward Goodnow’s Goodnow Investment Group also made a $2.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Peter Muller’s PDT Partners, Jim Simons’ Renaissance Technologies, and Chao Ku’s Nine Chapters Capital Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as NN, Inc. (NASDAQ:NNBR) but similarly valued. These stocks are Double Eagle Acqusition Corp (NASDAQ:EAGL), Xencor Inc (NASDAQ:XNCR), Carmike Cinemas, Inc. (NASDAQ:CKEC), and Mag Silver Corp (USA) (NYSEAMEX:MVG). This group of stocks’ market valuations match NNBR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EAGL | 21 | 188341 | 21 |
| XNCR | 19 | 91690 | 3 |
| CKEC | 26 | 99288 | 2 |
| MVG | 11 | 32624 | -1 |
As you can see these stocks had an average of 19.25 hedge funds with bullish positions and the average amount invested in these stocks was $103 million. That figure was $59 million in NNBR’s case. Carmike Cinemas, Inc. (NASDAQ:CKEC) is the most popular stock in this table. On the other hand Mag Silver Corp (USA) (NYSEAMEX:MVG) is the least popular one with only 11 bullish hedge fund positions. NN, Inc. (NASDAQ:NNBR) 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 CKEC might be a better candidate to consider a long position.
