Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow over 700 of the best-performing investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Nordstrom, Inc. (NYSE:JWN), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Nordstrom, Inc. (NYSE:JWN) was in 26 hedge funds’ portfolios at the end of the third quarter of 2018. JWN investors should pay attention to an increase in activity from the world’s largest hedge funds recently. There were 23 hedge funds in our database with JWN positions at the end of the previous quarter. Our calculations also showed that jwn isn’t among the 30 most popular stocks among hedge funds.
According to most investors, hedge funds are assumed to be underperforming, outdated financial tools of yesteryear. While there are over 8,000 funds in operation today, Our experts look at the top tier of this club, about 700 funds. It is estimated that this group of investors command most of the hedge fund industry’s total asset base, and by shadowing their unrivaled equity investments, Insider Monkey has figured out a number of investment strategies that have historically defeated Mr. Market. Insider Monkey’s flagship hedge fund strategy outperformed the S&P 500 index by 6 percentage points per year since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 24% since February 2017 (through December 3rd) even though the market was up nearly 23% during the same period. We just shared a list of 11 short targets in our latest quarterly update.
We’re going to take a look at the recent hedge fund action encompassing Nordstrom, Inc. (NYSE:JWN).
What have hedge funds been doing with Nordstrom, Inc. (NYSE:JWN)?
At the end of the third quarter, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from one quarter earlier. By comparison, 26 hedge funds held shares or bullish call options in JWN heading into this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Millennium Management held the most valuable stake in Nordstrom, Inc. (NYSE:JWN), which was worth $94.4 million at the end of the third quarter. On the second spot was Ariel Investments which amassed $50.9 million worth of shares. Moreover, Citadel Investment Group, Two Sigma Advisors, and Element Capital Management were also bullish on Nordstrom, Inc. (NYSE:JWN), allocating a large percentage of their portfolios to this stock.
Consequently, key money managers were leading the bulls’ herd. Element Capital Management, managed by Jeffrey Talpins, created the most valuable position in Nordstrom, Inc. (NYSE:JWN). Element Capital Management had $24.9 million invested in the company at the end of the quarter. Robert B. Gillam’s McKinley Capital Management also initiated a $17.2 million position during the quarter. The other funds with brand new JWN positions are Jim Simons’s Renaissance Technologies, Matthew Tewksbury’s Stevens Capital Management, and Phill Gross and Robert Atchinson’s Adage Capital Management.
Let’s now review hedge fund activity in other stocks similar to Nordstrom, Inc. (NYSE:JWN). We will take a look at LKQ Corporation (NASDAQ:LKQ), The Ultimate Software Group, Inc. (NASDAQ:ULTI), BanColombia S.A. (NYSE:CIB), and Molson Coors Brewing Company (NYSE:TAP). This group of stocks’ market values are similar to JWN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LKQ | 45 | 1250168 | 5 |
| ULTI | 25 | 438580 | 7 |
| CIB | 5 | 101550 | 0 |
| TAP | 31 | 557374 | 12 |
| Average | 26.5 | 586918 | 6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.5 hedge funds with bullish positions and the average amount invested in these stocks was $587 million. That figure was $389 million in JWN’s case. LKQ Corporation (NASDAQ:LKQ) is the most popular stock in this table. On the other hand BanColombia S.A. (NYSE:CIB) is the least popular one with only 5 bullish hedge fund positions. Nordstrom, Inc. (NYSE:JWN) 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 LKQ might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
