Hedge Funds Are Buying NIC Inc. (EGOV)

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on NIC Inc. (NASDAQ:EGOV).

Is NIC Inc. (NASDAQ:EGOV) an outstanding investment now? The best stock pickers are definitely becoming more confident. The number of long hedge fund bets that are revealed through the 13F filings improved by 1 in recent months. EGOV was in 13 hedge funds’ portfolios at the end of September. There were 12 hedge funds in our database with EGOV positions at the end of the previous quarter. At the end of this article we will also compare EGOV to other stocks including Noble Corporation (NYSE:NE), Enerplus Corp (USA) (NYSE:ERF), and California Water Service Group (NYSE:CWT) to get a better sense of its popularity.

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What have hedge funds been doing with NIC Inc. (NASDAQ:EGOV)?

Heading into the fourth quarter of 2016, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a gain of 8% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards EGOV over the last 5 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Renaissance Technologies, one of the largest hedge funds in the world, holds the most valuable position in NIC Inc. (NASDAQ:EGOV) which has a $26.9 million position in the stock. The second most bullish fund manager is D. E. Shaw’s D E Shaw, which holds a $15.8 million position. Some other hedge funds and institutional investors with similar optimism comprise Joel Greenblatt’s Gotham Asset Management, John Overdeck and David Siegel’s Two Sigma Advisors and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Consequently, key money managers have jumped into NIC Inc. (NASDAQ:EGOV) headfirst. Matthew Tewksbury of Stevens Capital Management established the most valuable position in NIC Inc. (NASDAQ:EGOV). Stevens Capital Management had $0.6 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also made a $0.4 million investment in the stock during the quarter. The only other fund with a new position in the stock is Dmitry Balyasny’s Balyasny Asset Management.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as NIC Inc. (NASDAQ:EGOV) but similarly valued. We will take a look at Noble Corporation (NYSE:NE), Enerplus Corp (USA) (NYSE:ERF), California Water Service Group (NYSE:CWT), and International Speedway Corporation (NASDAQ:ISCA). This group of stocks’ market caps are closest to EGOV’s market cap.

As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $157 million. That figure was $62 million in EGOV’s case. Noble Corporation (NYSE:NE) is the most popular stock in this table. On the other hand California Water Service Group (NYSE:CWT) is the least popular one with only 11 bullish hedge fund positions. NIC Inc. (NASDAQ:EGOV) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard NE might be a better candidate to consider taking a long position in.

Disclosure: None