At Insider Monkey, we pore over the filings of more than 700 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Nationstar Mortgage Holdings Inc (NYSE:NSM) makes for a good investment right now.
Nationstar Mortgage Holdings Inc (NYSE:NSM) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 22 hedge funds’ portfolios at the end of September. At the end of this article we will also compare NSM to other stocks including American Axle & Manufact. Holdings, Inc. (NYSE:AXL), Paylocity Holding Corp (NASDAQ:PCTY), and Ship Finance International Limited (NYSE:SFL) to get a better sense of its popularity.
Follow Nationstar Mortgage Holdings Inc. (NYSE:NSM)
Follow Nationstar Mortgage Holdings Inc. (NYSE:NSM)
According to most stock holders, hedge funds are assumed to be slow, outdated financial tools of the past. While there are more than an 8000 funds with their doors open at the moment, Our researchers hone in on the bigwigs of this group, around 700 funds. These hedge fund managers shepherd bulk of all hedge funds’ total capital, and by tailing their first-class investments, Insider Monkey has identified many investment strategies that have historically exceeded the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy outrun the S&P 500 index by 12 percentage points annually for a decade in their back tests.
With all of this in mind, let’s take a peek at the recent action surrounding Nationstar Mortgage Holdings Inc (NYSE:NSM).
How are hedge funds trading Nationstar Mortgage Holdings Inc (NYSE:NSM)?
According to Insider Monkey’s hedge fund database, Fortress Investment Group, managed by Michael Novogratz, holds the largest position in Nationstar Mortgage Holdings Inc (NYSE:NSM). Fortress Investment Group has a $930.4 million position in the stock, comprising 14.2% of its 13F portfolio. The second largest stake is held by Citadel Investment Group, led by Ken Griffin, holding a $54 million position; 0.1% of its 13F portfolio is allocated to the company. Other members of the smart money that are bullish consist of Robert Joseph Caruso’s Select Equity Group, Michael Blitzer’s Kingstown Capital Management and Clint Carlson’s Carlson Capital.
At the top of the heap, Brian Taylor’s Pine River Capital Management dropped the largest position of the 700 funds followed by Insider Monkey, worth about $10.1 million in stock. Robert Pohly’s fund, Samlyn Capital, also cut its stock, about $9.8 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Nationstar Mortgage Holdings Inc (NYSE:NSM) but similarly valued. We will take a look at American Axle & Manufact. Holdings, Inc. (NYSE:AXL), Paylocity Holding Corp (NASDAQ:PCTY), Ship Finance International Limited (NYSE:SFL), and Eagle Bancorp, Inc. (NASDAQ:EGBN). This group of stocks’ market values resemble NSM’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AXL | 19 | 297821 | -3 |
| PCTY | 19 | 88893 | 8 |
| SFL | 16 | 28713 | -3 |
| EGBN | 11 | 105735 | 1 |
As you can see these stocks had an average of 16.25 hedge funds with bullish positions and the average amount invested in these stocks was $130 million. That figure was $1,283 million in NSM’s case. American Axle & Manufact. Holdings, Inc. (NYSE:AXL) is the most popular stock in this table. On the other hand Eagle Bancorp, Inc. (NASDAQ:EGBN) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Nationstar Mortgage Holdings Inc (NYSE:NSM) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
