Is Natural Gas Services Group, Inc. (NYSE:NGS) a good equity to bet on right now? We like to check what the smart money thinks first before doing extensive research. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to find the latest market-moving information.
Natural Gas Services Group, Inc. (NYSE:NGS) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 9 hedge funds’ portfolios at the end of September. At the end of this article we will also compare NGS to other stocks including Immune Desing Corp (NASDAQ:IMDZ), Exactech, Inc. (NASDAQ:EXAC), and aTyr Pharma Inc. (NASDAQ:LIFE) to get a better sense of its popularity.
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Keeping this in mind, we’re going to review the new action surrounding Natural Gas Services Group, Inc. (NYSE:NGS).
What have hedge funds been doing with Natural Gas Services Group, Inc. (NYSE:NGS)?
According to Insider Monkey’s hedge fund database, Matthew A. Weatherbie’s Weatherbie Capital has the number one position in Natural Gas Services Group, Inc. (NYSE:NGS), worth close to $10.2 million, amounting to 1.2% of its total 13F portfolio. Sitting at the No. 2 spot is Julian Allen of Spitfire Capital, with an $9.4 million position; the fund has 4% of its 13F portfolio invested in the stock. Some other professional money managers that hold long positions contain Chuck Royce’s Royce & Associates, Jim Simons’s Renaissance Technologies and Paul Hondros’s AlphaOne Capital Partners.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Citadel Investment Group. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 700+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was AlphaOne Capital Partners).
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Natural Gas Services Group, Inc. (NYSE:NGS) but similarly valued. These stocks are Immune Desing Corp (NASDAQ:IMDZ), Exactech, Inc. (NASDAQ:EXAC), aTyr Pharma Inc. (NASDAQ:LIFE), and Mobileiron Inc (NASDAQ:MOBL). All of these stocks’ market caps are similar to NGS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IMDZ | 6 | 16490 | 0 |
| EXAC | 12 | 28400 | 2 |
| LIFE | 7 | 46839 | -1 |
| MOBL | 8 | 8961 | 0 |
As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $25 million. That figure was $34 million in NGS’s case. Exactech, Inc. (NASDAQ:EXAC) is the most popular stock in this table. On the other hand Immune Desing Corp (NASDAQ:IMDZ) is the least popular one with only 6 bullish hedge fund positions. Natural Gas Services Group, Inc. (NYSE:NGS) is not the most popular stock in this group but hedge fund interest is still 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 EXAC might be a better candidate to consider a long position.
