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Is New Senior Investment Group Inc (SNR) Going to Burn These Hedge Funds?

Asma UL Husna
·6 min read

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the first quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of New Senior Investment Group Inc (NYSE:SNR) based on that data and determine whether they were really smart about the stock.

Is New Senior Investment Group Inc (NYSE:SNR) a healthy stock for your portfolio? The smart money was selling. The number of bullish hedge fund bets fell by 5 in recent months. Our calculations also showed that SNR isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). SNR was in 10 hedge funds' portfolios at the end of the first quarter of 2020. There were 15 hedge funds in our database with SNR positions at the end of the previous quarter. Video: Watch our video about the top 5 most popular hedge fund stocks.

In today’s marketplace there are a large number of indicators stock traders put to use to size up stocks. Two of the most innovative indicators are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the elite money managers can beat the S&P 500 by a solid margin (see the details here).

[caption id="attachment_26283" align="aligncenter" width="392"] Leon Cooperman of Omega Advisors[/caption]

OMEGA ADVISORS
OMEGA ADVISORS

At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a "weekend trading strategy", so we look into his strategy's picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller's investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let's go over the fresh hedge fund action regarding New Senior Investment Group Inc (NYSE:SNR).

What does smart money think about New Senior Investment Group Inc (NYSE:SNR)?

At the end of the first quarter, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -33% from the previous quarter. By comparison, 17 hedge funds held shares or bullish call options in SNR a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Renaissance Technologies held the most valuable stake in New Senior Investment Group Inc (NYSE:SNR), which was worth $17.7 million at the end of the third quarter. On the second spot was Omega Advisors which amassed $12.4 million worth of shares. Arrowstreet Capital, GLG Partners, and Marshall Wace LLP 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 Omega Advisors allocated the biggest weight to New Senior Investment Group Inc (NYSE:SNR), around 1.6% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, setting aside 0.02 percent of its 13F equity portfolio to SNR.

Due to the fact that New Senior Investment Group Inc (NYSE:SNR) has experienced bearish sentiment from hedge fund managers, it's easy to see that there is a sect of hedge funds who were dropping their positions entirely heading into Q4. Interestingly, Israel Englander's Millennium Management said goodbye to the biggest stake of the "upper crust" of funds monitored by Insider Monkey, totaling an estimated $0.5 million in stock. Bruce Kovner's fund, Caxton Associates LP, also said goodbye to its stock, about $0.4 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 5 funds heading into Q4.

Let's now review hedge fund activity in other stocks similar to New Senior Investment Group Inc (NYSE:SNR). We will take a look at Capital Southwest Corporation (NASDAQ:CSWC), Gritstone Oncology, Inc. (NASDAQ:GRTS), AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG), and Maui Land & Pineapple Company, Inc. (NYSE:MLP). All of these stocks' market caps are similar to SNR's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CSWC,7,10362,-6 GRTS,7,44260,1 AMAG,12,92458,0 MLP,1,1704,-1 Average,6.75,37196,-1.5 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 6.75 hedge funds with bullish positions and the average amount invested in these stocks was $37 million. That figure was $33 million in SNR's case. AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) is the most popular stock in this table. On the other hand Maui Land & Pineapple Company, Inc. (NYSE:MLP) is the least popular one with only 1 bullish hedge fund positions. New Senior Investment Group Inc (NYSE:SNR) is not the most popular stock in this group but hedge fund interest is still above average. 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 12.3% in 2020 through June 30th but still beat the market by 15.5 percentage points. Hedge funds were also right about betting on SNR as the stock returned 44.1% in Q2 and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.

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