Out of thousands of stocks that are currently traded on the market, it is difficult to determine those that can really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of over 700 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Nam Tai Property Inc (NYSE:NTP).
Nam Tai Property Inc (NYSE:NTP) investors should be aware of an increase in activity from the world's largest hedge funds of late. NTP was in 8 hedge funds' portfolios at the end of September. There were 6 hedge funds in our database with NTP holdings at the end of the previous quarter. Our calculations also showed that NTP isn't among the 30 most popular stocks among hedge funds.
In the eyes of most shareholders, hedge funds are seen as worthless, old financial vehicles of years past. While there are more than 8,000 funds in operation at the moment, We choose to focus on the bigwigs of this group, about 700 funds. It is estimated that this group of investors orchestrate bulk of the hedge fund industry's total asset base, and by following their highest performing stock picks, Insider Monkey has found many investment strategies that have historically outstripped the S&P 500 index. Insider Monkey's flagship hedge fund strategy beat the S&P 500 index by 6 percentage points annually since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 24% since February 2017 (through December 3rd) even though the market was up nearly 23% during the same period. We just shared a list of 11 short targets in our latest quarterly update.
We're going to take a look at the key hedge fund action encompassing Nam Tai Property Inc (NYSE:NTP).
What does the smart money think about Nam Tai Property Inc (NYSE:NTP)?
Heading into the fourth quarter of 2018, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 33% from the previous quarter. The graph below displays the number of hedge funds with bullish position in NTP over the last 13 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey's hedge fund database, Kahn Brothers, managed by Irving Kahn, holds the biggest position in Nam Tai Property Inc (NYSE:NTP). Kahn Brothers has a $18.7 million position in the stock, comprising 2.9% of its 13F portfolio. Coming in second is Phil Frohlich of Prescott Group Capital Management, with a $3.9 million position; 0.8% of its 13F portfolio is allocated to the stock. Other professional money managers that hold long positions include William C. Martin's Raging Capital Management, Cliff Asness's AQR Capital Management and Jim Simons's Renaissance Technologies.
Consequently, key hedge funds were breaking ground themselves. Raging Capital Management, managed by William C. Martin, initiated the largest position in Nam Tai Property Inc (NYSE:NTP). Raging Capital Management had $3.3 million invested in the company at the end of the quarter. Michael M. Rothenberg's Moab Capital Partners also initiated a $0.2 million position during the quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Nam Tai Property Inc (NYSE:NTP) but similarly valued. We will take a look at LSC Communications, Inc. (NYSE:LKSD), PCSB Financial Corporation (NASDAQ:PCSB), Cambridge Bancorp (NASDAQ:CATC), and Eidos Therapeutics, Inc. (NASDAQ:EIDX). This group of stocks' market caps match NTP's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LKSD,7,4722,1 PCSB,11,32500,2 CATC,5,15343,0 EIDX,14,69476,-2 Average,9.25,30510,0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $27 million in NTP's case. Eidos Therapeutics, Inc. (NASDAQ:EIDX) is the most popular stock in this table. On the other hand Cambridge Bancorp (NASDAQ:CATC) is the least popular one with only 5 bullish hedge fund positions. Nam Tai Property Inc (NYSE:NTP) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. In this regard EIDX might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.