Is Northern Dynasty Minerals Ltd. (USA) (NAK) Going to Burn These Hedge Funds?

Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Northern Dynasty Minerals Ltd. (USA) (NYSEMKT:NAK) but similarly valued. These stocks are Smith Micro Software, Inc. (NASDAQ:SMSI), The First Marblehead Corporation (NYSE:FMD), GenVec, Inc. (NASDAQ:GNVC), and Novacopper Inc (NYSEMKT:NCQ). This group of stocks’ market valuations are closest to NAK’s market valuation.

As yoAs you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $7 million. That figure was $2 million in NAK’s case. Novacopper Inc (NYSEMKT:NCQ) is the most popular stock in this table. On the other hand, The First Marblehead Corporation (NYSE:FMD) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Northern Dynasty Minerals Ltd. (USA) (NYSEMKT:NAK) is even less popular than FMD. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This doesn’t necessarily indicate that it is not a good stock to buy; it is also possible that investors hadn’t considered bullish thesis when they thought of the stock as overvalued. In any case, more research and is advisable.