The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Northern Dynasty Minerals Ltd (USA) (NYSEAMEX:NAK) .
Northern Dynasty Minerals Ltd (USA) (NYSEAMEX:NAK) shareholders have witnessed an increase in hedge fund interest of late. There were 5 hedge funds in our database with NAK holdings at the end of the previous quarter. At the end of this article we will also compare NAK to other stocks including Investors Title Company (NASDAQ:ITIC), Brookfield High Income Fund Inc (NYSE:HHY), and Rosetta Stone Inc (NYSE:RST) to get a better sense of its popularity.
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Follow Northern Dynasty Minerals Ltd (NYSEMKT:NAK)
We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.
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Keeping this in mind, we’re going to check out the fresh action regarding Northern Dynasty Minerals Ltd (USA) (NYSEAMEX:NAK).
How have hedgies been trading Northern Dynasty Minerals Ltd (USA) (NYSEAMEX:NAK)?
At Q3’s end, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 40% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards NAK over the last 5 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Kopernik Global Investors, led by David Iben, holds the number one position in Northern Dynasty Minerals Ltd (USA) (NYSEAMEX:NAK). Kopernik Global Investors has a $4.6 million position in the stock, comprising 1% of its 13F portfolio. The second most bullish fund manager is Sprott Asset Management, led by Eric Sprott, which holds a $2.2 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other peers with similar optimism comprise Paul J. Isaac’s Arbiter Partners Capital Management, Michael A. Price and Amos Meron’s Empyrean Capital Partners and Renaissance Technologies, one of the largest hedge funds in the world. We’d like to point out an extraordinary observation. Three 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.
As aggregate interest increased, specific money managers have jumped into Northern Dynasty Minerals Ltd (USA) (NYSEAMEX:NAK) headfirst. Empyrean Capital Partners assembled the most valuable position in Northern Dynasty Minerals Ltd (USA) (NYSEAMEX:NAK). Empyrean Capital Partners had $0.7 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $0.1 million position during the quarter. The following funds were also among the new NAK investors: Ken Griffin’s Citadel Investment Group and Ken Griffin’s Citadel Investment Group.
Let’s now take a look at hedge fund activity in other stocks similar to Northern Dynasty Minerals Ltd (USA) (NYSEAMEX:NAK). We will take a look at Investors Title Company (NASDAQ:ITIC), Brookfield High Income Fund Inc (NYSE:HHY), Rosetta Stone Inc (NYSE:RST), and Planet Payment Inc (NASDAQ:PLPM). This group of stocks’ market valuations are closest to NAK’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ITIC | 2 | 22716 | 0 |
| HHY | 3 | 3689 | 0 |
| RST | 10 | 93566 | 0 |
| PLPM | 10 | 11707 | -1 |
As you can see these stocks had an average of 6.25 hedge funds with bullish positions and the average amount invested in these stocks was $33 million. That figure was $9 million in NAK’s case. Rosetta Stone Inc (NYSE:RST) is the most popular stock in this table. On the other hand Investors Title Company (NASDAQ:ITIC) is the least popular one with only 2 bullish hedge fund positions. Northern Dynasty Minerals Ltd (USA) (NYSEAMEX:NAK) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard RST might be a better candidate to consider taking a long position in.
