You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
Hedge fund interest in NovaGold Resources Inc. (USA) (NYSEMKT:NG) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare NG to other stocks including Insmed Incorporated (NASDAQ:INSM), Eagle Pharmaceuticals Inc (NASDAQ:EGRX), and Federal-Mogul Holdings Corp (NASDAQ:FDML) to get a better sense of its popularity.
Follow Novagold Resources Inc (NYSEMKT:NG)
Follow Novagold Resources Inc (NYSEMKT:NG)
Now, let’s take a gander at the recent action encompassing NovaGold Resources Inc. (USA) (NYSEMKT:NG).
How have hedgies been trading NovaGold Resources Inc. (USA) (NYSEMKT:NG)?
At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, John Paulson’s Paulson & Co has the largest position in NovaGold Resources Inc. (USA) (NYSEMKT:NG), worth close to $128.6 million, comprising 0.7% of its total 13F portfolio. On Paulson & Co’s heels is Baupost Group, led by Seth Klarman, holding a $78.3 million position; the fund has 1.3% of its 13F portfolio invested in the stock. Remaining members of the smart money that hold long positions contain Robert Pitts’ Steadfast Capital Management, David Iben’s Kopernik Global Investors and Marc Lisker, Glenn Fuhrman and John Phelan’s MSDC Management.
Interestingly, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners cut the largest stake of all the hedgies watched by Insider Monkey, valued at close to $0.1 million in stock. Ken Fisher’s fund, Fisher Asset Management, also cut its stock, about $0.1 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 also examine hedge fund activity in other stocks – not necessarily in the same industry as NovaGold Resources Inc. (USA) (NYSEMKT:NG) but similarly valued. We will take a look at Insmed Incorporated (NASDAQ:INSM), Eagle Pharmaceuticals Inc (NASDAQ:EGRX), Federal-Mogul Holdings Corp (NASDAQ:FDML), and Seres Therapeutics Inc (NASDAQ:MCRB). This group of stocks’ market valuations match NG’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| INSM | 17 | 247410 | 1 |
| EGRX | 15 | 210648 | -4 |
| FDML | 14 | 1009725 | 0 |
| MCRB | 10 | 43115 | -3 |
As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $378 million. That figure was $277 million in NG’s case. Insmed Incorporated (NASDAQ:INSM) is the most popular stock in this table. On the other hand Seres Therapeutics Inc (NASDAQ:MCRB) is the least popular one with only 10 bullish hedge fund positions. Along with INSM, NovaGold Resources Inc. (USA) (NYSEMKT:NG) is the most popular stock in the group, and that attribute makes it worth a closer look.
