Is New Mountain Finance Corp. (NMFC) A Good Stock To Buy?

As industrywide interest jumped, specific money managers were breaking ground themselves. Clough Capital Partners, led by Charles Clough, initiated the biggest position in New Mountain Finance Corp. (NYSE:NMFC). Clough Capital Partners had $1.9 million invested in the company at the end of the quarter. Robert Raiff’s Raiff Partners also initiated a $1.4 million position during the quarter. The only other fund with a new position in the stock is Peter Muller’s PDT Partners.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as New Mountain Finance Corp. (NYSE:NMFC) but similarly valued. We will take a look at Hibbett Sports, Inc. (NASDAQ:HIBB), NutriSystem Inc. (NASDAQ:NTRI), Lydall, Inc. (NYSE:LDL), and HealthStream, Inc. (NASDAQ:HSTM). This group of stocks’ market caps are similar to NMFC’s market cap.

As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $67 million. That figure was $15 million in NMFC’s case. NutriSystem Inc. (NASDAQ:NTRI) is the most popular stock in this table. On the other hand Hibbett Sports, Inc. (NASDAQ:HIBB) is the least popular one with only 9 bullish hedge fund positions. New Mountain Finance Corp. (NYSE:NMFC) 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 NTRI might be a better candidate to consider taking a long position in.

Disclosure: None