The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Niu Technologies (NASDAQ:NIU).
Hedge fund interest in Niu Technologies (NASDAQ:NIU) 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 NIU to other stocks including Conduent Incorporated (NASDAQ:CNDT), trivago N.V. (NASDAQ:TRVG), and RAPT Therapeutics, Inc. (NASDAQ:RAPT) to get a better sense of its popularity. Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
[caption id="attachment_699750" align="aligncenter" width="399"] Gifford Combs of Dalton Investments[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let's view the latest hedge fund action surrounding Niu Technologies (NASDAQ:NIU).
How have hedgies been trading Niu Technologies (NASDAQ:NIU)?
At Q1's end, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards NIU over the last 18 quarters. With hedge funds' capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Yiheng Capital, managed by Jonathan Guo, holds the number one position in Niu Technologies (NASDAQ:NIU). Yiheng Capital has a $24.7 million position in the stock, comprising 1.9% of its 13F portfolio. Sitting at the No. 2 spot is Dalton Investments, led by Gifford Combs, holding a $3.2 million position; the fund has 2.5% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that hold long positions include Renaissance Technologies, John Overdeck and David Siegel's Two Sigma Advisors and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position Dalton Investments allocated the biggest weight to Niu Technologies (NASDAQ:NIU), around 2.48% of its 13F portfolio. Yiheng Capital is also relatively very bullish on the stock, earmarking 1.94 percent of its 13F equity portfolio to NIU.
Due to the fact that Niu Technologies (NASDAQ:NIU) has faced declining sentiment from the smart money, it's easy to see that there lies a certain "tier" of hedgies that decided to sell off their entire stakes heading into Q4. It's worth mentioning that Wang Chan's Serenity Capital cut the largest investment of the "upper crust" of funds monitored by Insider Monkey, worth about $3.4 million in stock. Gavin Saitowitz and Cisco J. del Valle's fund, Springbok Capital, also dropped its stock, about $0.6 million worth. These transactions are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Niu Technologies (NASDAQ:NIU) but similarly valued. These stocks are Conduent Incorporated (NASDAQ:CNDT), trivago N.V. (NASDAQ:TRVG), RAPT Therapeutics, Inc. (NASDAQ:RAPT), and Knoll Inc (NYSE:KNL). This group of stocks' market values match NIU's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CNDT,18,167125,-8 TRVG,7,46090,-2 RAPT,5,7977,5 KNL,11,18105,-8 Average,10.25,59824,-3.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $60 million. That figure was $31 million in NIU's case. Conduent Incorporated (NASDAQ:CNDT) is the most popular stock in this table. On the other hand RAPT Therapeutics, Inc. (NASDAQ:RAPT) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Niu Technologies (NASDAQ:NIU) is even less popular than RAPT. Hedge funds clearly dropped the ball on NIU as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. A small number of hedge funds were also right about betting on NIU as the stock returned 52.8% so far in the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.