New Mountain Finance Corp. (NYSE:NMFC) investors should pay attention to a decrease in hedge fund sentiment recently.
In today’s marketplace, there are tons of gauges shareholders can use to monitor their holdings. A duo of the best are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite hedge fund managers can outpace the S&P 500 by a healthy margin (see just how much).
Equally as important, optimistic insider trading activity is a second way to break down the financial markets. Just as you’d expect, there are plenty of incentives for a bullish insider to sell shares of his or her company, but just one, very obvious reason why they would buy. Plenty of empirical studies have demonstrated the impressive potential of this method if “monkeys” know what to do (learn more here).
Consequently, it’s important to take a peek at the key action surrounding New Mountain Finance Corp. (NYSE:NMFC).
Hedge fund activity in New Mountain Finance Corp. (NYSE:NMFC)
At the end of the fourth quarter, a total of 6 of the hedge funds we track were bullish in this stock, a change of -33% from one quarter earlier. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their holdings meaningfully.
When looking at the hedgies we track, Steven B. Klinsky’s New Mountain Capital had the most valuable position in New Mountain Finance Corp. (NYSE:NMFC), worth close to $34.3 million, comprising 20.9% of its total 13F portfolio. On New Mountain Capital’s heels is Millennium Management, managed by Israel Englander, which held a $4.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Robert B. Gillam’s McKinley Capital Management, Brian Taylor’s Pine River Capital Management and Scott Scher & Michael Prober’s Clovis Capital Management.
Seeing as New Mountain Finance Corp. (NYSE:NMFC) has experienced a declination in interest from hedge fund managers, it’s easy to see that there lies a certain “tier” of hedge funds that decided to sell off their positions entirely heading into 2013. It’s worth mentioning that D. E. Shaw’s D E Shaw sold off the largest position of all the hedgies we key on, totaling close to $1.8 million in stock.. John Overdeck and David Siegel’s fund, Two Sigma Advisors, also sold off its stock, about $0.6 million worth. These moves are important to note, as total hedge fund interest dropped by 3 funds heading into 2013.
Insider trading activity in New Mountain Finance Corp. (NYSE:NMFC)
Insider trading activity, especially when it’s bullish, is at its handiest when the primary stock in question has seen transactions within the past six months. Over the last half-year time frame, New Mountain Finance Corp. (NYSE:NMFC) has experienced 7 unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to New Mountain Finance Corp. (NYSE:NMFC). These stocks are ROI Acquisition Corp (NASDAQ:ROIQ), Lydall, Inc. (NYSE:LDL), SCG Financial Acquisition Corp (NASDAQ:SCGQ), Blue Wolf Mongolia Holdings Corp. (NASDAQ:MNGL), and Hyde Park Acquisition Corp II (NASDAQ:HPAC). This group of stocks are in the conglomerates industry and their market caps match NMFC’s market cap.