Do Hedge Funds Love Nu Skin Enterprises, Inc. (NUS)?

Before we spend days researching a stock idea we’d like to take a look at how hedge funds and billionaire investors recently traded that stock. S&P 500 Index returned about 5.2% during the last 12 months ending October 30, 2015. Less than 49% of the stocks in the index outperformed the index. This means you (or a monkey throwing a dart) have less than an even chance of beating the market by randomly picking a stock. On the other hand, the top 30 S&P 500 stocks among hedge funds at the end of September 2014 had an average return of 9.5% during the same period. Sixty three percent of these 30 stocks outperformed the market. Hedge funds had bad stock picks like everyone else. Micron, which lost 50% over this period, was one of hedge funds’ 30 favorite S&P 500 stocks. Anadarko Petroleum was another failed stock pick which lost more than 26%. So, taking cues from hedge funds isn’t a foolproof strategy, but it seems to work on average. In this article, we will take a look at what hedge funds think about Nu Skin Enterprises, Inc. (NYSE:NUS).

Is Nu Skin Enterprises, Inc. (NYSE:NUS) the right investment to pursue these days? The smart money is becoming hopeful. The number of bullish hedge fund bets increased by 6 in recent months. NUS was in 29 hedge funds’ portfolios at the end of the third quarter of 2015. There were 23 hedge funds in our database with NUS positions at the end of the previous quarter. At the end of this article we will also compare NUS to other stocks including Big Lots, Inc. (NYSE:BIG), CLARCOR Inc. (NYSE:CLC), and Prestige Brands Holdings, Inc. (NYSE:PBH) to get a better sense of its popularity.

Now, we’re going to take a peek at the latest action encompassing Nu Skin Enterprises, Inc. (NYSE:NUS).

How have hedgies been trading Nu Skin Enterprises, Inc. (NYSE:NUS)?

At the end of the third quarter, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 26% from the previous quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Chuck Royce’s Royce & Associates has the most valuable position in Nu Skin Enterprises, Inc. (NYSE:NUS), worth close to $78.7 million, corresponding to 0.4% of its total 13F portfolio. The second most bullish fund manager is Israel Englander of Millennium Management, with a $12.6 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors that are bullish consist of Phil Frohlich’s Prescott Group Capital Management, John Overdeck and David Siegel’s Two Sigma Advisors and Ken Griffin’s Citadel Investment Group.

Consequently, key money managers were leading the bulls’ herd. Hutchin Hill Capital, managed by Neil Chriss, initiated the most outsized position in Nu Skin Enterprises, Inc. (NYSE:NUS). Hutchin Hill Capital had $6.6 million invested in the company at the end of the quarter. Jeffrey Altman’s Owl Creek Asset Management also made a $5.3 million investment in the stock during the quarter. The other funds with brand new NUS positions are Dmitry Balyasny’s Balyasny Asset Management, David Costen Haley’s HBK Investments, and Ray Carroll’s Breton Hill Capital.

Let’s now review hedge fund activity in other stocks similar to Nu Skin Enterprises, Inc. (NYSE:NUS). We will take a look at Big Lots, Inc. (NYSE:BIG), CLARCOR Inc. (NYSE:CLC), Prestige Brands Holdings, Inc. (NYSE:PBH), and Snyder S Lance Inc (NASDAQ:LNCE). This group of stocks’ market values resemble NUS’s market value.

As you can see these stocks had an average of 14.25 hedge funds with bullish positions and the average amount invested in these stocks was $176 million. That figure was $176 million in NUS’s case. Big Lots, Inc. (NYSE:BIG) is the most popular stock in this table. On the other hand Prestige Brands Holdings, Inc. (NYSE:PBH) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Nu Skin Enterprises, Inc. (NYSE:NUS) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.