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The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards NCR Corporation (NYSE:NCR).
Is NCR Corporation (NYSE:NCR) a great investment right now? Prominent investors were getting more optimistic. The number of bullish hedge fund positions moved up by 14 recently. NCR Corporation (NYSE:NCR) was in 38 hedge funds' portfolios at the end of June. The all time high for this statistic is 42. Our calculations also showed that NCR isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 24 hedge funds in our database with NCR positions at the end of the first quarter.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Glenn Welling of Engaged Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, we like undervalued, EBITDA-positive growth stocks, so we are checking out stock pitches like this emerging biotech stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now let's take a look at the latest hedge fund action regarding NCR Corporation (NYSE:NCR).
Do Hedge Funds Think NCR Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 38 of the hedge funds tracked by Insider Monkey were long this stock, a change of 58% from the previous quarter. On the other hand, there were a total of 32 hedge funds with a bullish position in NCR a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
More specifically, Engaged Capital was the largest shareholder of NCR Corporation (NYSE:NCR), with a stake worth $61.9 million reported as of the end of June. Trailing Engaged Capital was Nitorum Capital, which amassed a stake valued at $49.7 million. Beach Point Capital Management, Point72 Asset Management, and Cowbird Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Cowbird Capital allocated the biggest weight to NCR Corporation (NYSE:NCR), around 13.73% of its 13F portfolio. Cowbird Capital is also relatively very bullish on the stock, dishing out 11.89 percent of its 13F equity portfolio to NCR.
As aggregate interest increased, key money managers were leading the bulls' herd. Adage Capital Management, managed by Phill Gross and Robert Atchinson, assembled the biggest position in NCR Corporation (NYSE:NCR). Adage Capital Management had $33.1 million invested in the company at the end of the quarter. Guy Shahar's DSAM Partners also initiated a $29.9 million position during the quarter. The other funds with brand new NCR positions are Mike Masters's Masters Capital Management, Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors, and Jeffrey Hoffner's Engle Capital.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as NCR Corporation (NYSE:NCR) but similarly valued. We will take a look at AbCellera Biologics Inc. (NASDAQ:ABCL), DigitalOcean Holdings, Inc. (NYSE:DOCN), Yatsen Holding Limited (NYSE:YSG), Shoals Technologies Group, Inc. (NASDAQ:SHLS), Macy's, Inc. (NYSE:M), Douglas Emmett, Inc. (NYSE:DEI), and Huntsman Corporation (NYSE:HUN). This group of stocks' market values match NCR's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ABCL,18,773158,-2 DOCN,16,219780,-6 YSG,18,374234,-2 SHLS,12,342043,-10 M,35,1022637,4 DEI,19,360607,5 HUN,27,582433,-8 Average,20.7,524985,-2.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.7 hedge funds with bullish positions and the average amount invested in these stocks was $525 million. That figure was $526 million in NCR's case. Macy's, Inc. (NYSE:M) is the most popular stock in this table. On the other hand Shoals Technologies Group, Inc. (NASDAQ:SHLS) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks NCR Corporation (NYSE:NCR) is more popular among hedge funds. Our overall hedge fund sentiment score for NCR is 87.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 21.8% in 2021 through October 11th and still beat the market by 4.4 percentage points. Unfortunately NCR wasn't nearly as popular as these 5 stocks and hedge funds that were betting on NCR were disappointed as the stock returned -10.9% since the end of the second quarter (through 10/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.