The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Nevsun Resources (USA) (NYSEAMEX:NSU) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Nevsun Resources (USA) (NYSEAMEX:NSU) has experienced a decrease in support from the world’s most elite money managers in recent months. At the end of this article we will also compare NSU to other stocks, including Sequential Brands Group Inc (NASDAQ:SQBG), CONE Midstream Partners LP (NYSE:CNNX), and Flushing Financial Corporation (NASDAQ:FFIC) to get a better sense of its popularity.
Follow Nevsun Resources Ltd (NYSEMKT:NSU)
Follow Nevsun Resources Ltd (NYSEMKT:NSU)
To most investors, hedge funds are perceived as underperforming, old investment vehicles of yesteryear. While there are greater than 8000 funds trading at the moment, we choose to focus on the elite of this group, around 700 funds. These investment experts preside over the majority of the smart money’s total asset base, and by keeping an eye on their highest performing stock picks, Insider Monkey has formulated a number of investment strategies that have historically defeated Mr. Market. Insider Monkey’s small-cap hedge fund strategy outperformed the S&P 500 index by 12 percentage points a year for a decade in their back tests.
Keeping this in mind, we’re going to analyze the latest action surrounding Nevsun Resources (USA) (NYSEAMEX:NSU).
How are hedge funds trading Nevsun Resources (USA) (NYSEAMEX:NSU)?
Heading into Q4, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock flat over the quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers, who were boosting their holdings substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, managed by Jim Simons, holds the number one position in Nevsun Resources (USA) (NYSEAMEX:NSU). Renaissance Technologies has a $7.5 million position in the stock, comprising less than 0.1% of its 13F portfolio. On Renaissance Technologies’s heels is Sprott Asset Management, managed by Eric Sprott, which holds a $3.1 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining professional money managers with similar optimism include Jacob Gottlieb’s Visium Asset Management, Cliff Asness’s AQR Capital Management and Noam Gottesman’s GLG Partners.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions either. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Nevsun Resources (USA) (NYSEAMEX:NSU) but similarly valued. These stocks are Sequential Brands Group Inc (NASDAQ:SQBG), CONE Midstream Partners LP (NYSE:CNNX), Flushing Financial Corporation (NASDAQ:FFIC), and M/I Homes Inc (NYSE:MHO). All of these stocks’ market caps match NSU’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SQBG | 10 | 39532 | 3 |
| CNNX | 4 | 24553 | 1 |
| FFIC | 8 | 32491 | 1 |
| MHO | 16 | 61104 | 7 |
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $39 million, versus $19 million in NSU’s case. M/I Homes Inc (NYSE:MHO) is the most popular stock in this table, while CONE Midstream Partners LP (NYSE:CNNX) is the least popular one. Even though Nevsun Resources (USA) (NYSEAMEX:NSU) is not the most popular stock in this group, it enjoys a hedge fund interest above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard MHO might be a better candidate to consider a long position.
