We are still in an overall bull market and many stocks that smart money investors were piling into surged through November 22nd. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 52% and 49% respectively. Hedge funds' top 3 stock picks returned 39.1% this year and beat the S&P 500 ETFs by nearly 13 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That's why we believe it isn't a waste of time to check out hedge fund sentiment before you invest in a stock like Navios Maritime Partners L.P. (NYSE:NMM).
Navios Maritime Partners L.P. (NYSE:NMM) was in 3 hedge funds' portfolios at the end of the third quarter of 2019. NMM investors should pay attention to an increase in activity from the world's largest hedge funds of late. There were 1 hedge funds in our database with NMM positions at the end of the previous quarter. Our calculations also showed that NMM isn't among the 30 most popular stocks among hedge funds.
To the average investor there are tons of tools shareholders can use to analyze their holdings. Two of the less utilized tools are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the best picks of the top money managers can outperform the S&P 500 by a very impressive amount (see the details here).
[caption id="attachment_746893" align="aligncenter" width="473"] Paul Marshall of Marshall Wace[/caption]
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world's most bearish hedge fund that's more convinced than ever that a crash is coming, our long-short investment strategy doesn't rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds' buy/sell signals. We're going to review the recent hedge fund action encompassing Navios Maritime Partners L.P. (NYSE:NMM).
How are hedge funds trading Navios Maritime Partners L.P. (NYSE:NMM)?
At Q3's end, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 200% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards NMM over the last 17 quarters. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital has the most valuable position in Navios Maritime Partners L.P. (NYSE:NMM), worth close to $1.2 million, amounting to less than 0.1%% of its total 13F portfolio. The second largest stake is held by Renaissance Technologies, holding a $1.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers with similar optimism contain Ken Griffin's Citadel Investment Group, Paul Marshall and Ian Wace's Marshall Wace and . In terms of the portfolio weights assigned to each position Arrowstreet Capital allocated the biggest weight to Navios Maritime Partners L.P. (NYSE:NMM), around 0.0027% of its portfolio. Renaissance Technologies is also relatively very bullish on the stock, earmarking 0.0009 percent of its 13F equity portfolio to NMM.
With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, assembled the most valuable position in Navios Maritime Partners L.P. (NYSE:NMM). Arrowstreet Capital had $1.2 million invested in the company at the end of the quarter. Ken Griffin's Citadel Investment Group also initiated a $0.2 million position during the quarter. The only other fund with a brand new NMM position is Paul Marshall and Ian Wace's Marshall Wace.
Let's now review hedge fund activity in other stocks similar to Navios Maritime Partners L.P. (NYSE:NMM). We will take a look at Capital Product Partners L.P. (NASDAQ:CPLP), Misonix, Inc. (NASDAQ:MSON), Allegro Merger Corp. (NASDAQ:ALGR), and Evolution Petroleum Corporation (NYSE:EPM). All of these stocks' market caps are similar to NMM's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CPLP,5,3768,0 MSON,3,6147,0 ALGR,11,23423,0 EPM,12,20409,-2 Average,7.75,13437,-0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.75 hedge funds with bullish positions and the average amount invested in these stocks was $13 million. That figure was $2 million in NMM's case. Evolution Petroleum Corporation (NYSE:EPM) is the most popular stock in this table. On the other hand Misonix, Inc. (NASDAQ:MSON) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Navios Maritime Partners L.P. (NYSE:NMM) is even less popular than MSON. Hedge funds dodged a bullet by taking a bearish stance towards NMM. Our calculations showed that the top 20 most popular hedge fund stocks returned 34.7% in 2019 through November 22nd and outperformed the S&P 500 ETF (SPY) by 8.5 percentage points. Unfortunately NMM wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); NMM investors were disappointed as the stock returned 1.3% during the fourth quarter (through 11/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.