Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Manning and Napier Inc (NYSE:MN).
Is MN a good stock to buy now? Manning and Napier Inc (NYSE:MN) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 10 hedge funds' portfolios at the end of September. Our calculations also showed that MN isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Synlogic, Inc. (NASDAQ:SYBX), Infinity Pharmaceuticals Inc. (NASDAQ:INFI), and Cinedigm Corp (NASDAQ:CIDM) to gather more data points.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Anton Schutz of Mendon Capital Advisors
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. With all of this in mind we're going to go over the new hedge fund action surrounding Manning and Napier Inc (NYSE:MN).
Do Hedge Funds Think MN Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards MN over the last 21 quarters. With hedge funds' capital changing hands, there exists an "upper tier" of key hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies has the biggest position in Manning and Napier Inc (NYSE:MN), worth close to $4.9 million, amounting to less than 0.1%% of its total 13F portfolio. On Renaissance Technologies's heels is Mendon Capital Advisors, led by Anton Schutz, holding a $1.7 million position; 1% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors with similar optimism encompass Israel Englander's Millennium Management, Mario Gabelli's GAMCO Investors and Chuck Royce's Royce & Associates. In terms of the portfolio weights assigned to each position Mendon Capital Advisors allocated the biggest weight to Manning and Napier Inc (NYSE:MN), around 1% of its 13F portfolio. Osmium Partners is also relatively very bullish on the stock, earmarking 0.21 percent of its 13F equity portfolio to MN.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Paloma Partners. 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 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Osmium Partners).
Let's now take a look at hedge fund activity in other stocks similar to Manning and Napier Inc (NYSE:MN). These stocks are Synlogic, Inc. (NASDAQ:SYBX), Infinity Pharmaceuticals Inc. (NASDAQ:INFI), Cinedigm Corp (NASDAQ:CIDM), Amtech Systems, Inc. (NASDAQ:ASYS), Twin Disc, Incorporated (NASDAQ:TWIN), First National Corporation (NASDAQ:FXNC), and Inspired Entertainment, Inc. (NASDAQ:INSE). This group of stocks' market values are closest to MN's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SYBX,6,6157,-4 INFI,6,24412,1 CIDM,3,2826,-1 ASYS,7,11347,-1 TWIN,4,14625,-4 FXNC,2,6506,0 INSE,5,14453,-2 Average,4.7,11475,-1.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 4.7 hedge funds with bullish positions and the average amount invested in these stocks was $11 million. That figure was $9 million in MN's case. Amtech Systems, Inc. (NASDAQ:ASYS) is the most popular stock in this table. On the other hand First National Corporation (NASDAQ:FXNC) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Manning and Napier Inc (NYSE:MN) is more popular among hedge funds. Our overall hedge fund sentiment score for MN is 82.3. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks returned 32.9% in 2020 through December 8th but still managed to beat the market by 16.2 percentage points. Hedge funds were also right about betting on MN as the stock returned 31.1% since the end of September (through 12/8) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.