It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. The S&P 500 Index gained 7.6% in the 12 month-period that ended November 21, while less than 49% of its stocks beat the benchmark. In contrast, the 30 most popular mid-cap stocks among the top hedge fund investors tracked by the Insider Monkey team returned 18% over the same period, which provides evidence that these money managers do have great stock picking abilities. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Nuveen Credit Strategies Income Fund (NYSE:JQC).
Nuveen Credit Strategies Income Fund (NYSE:JQC) was in 7 hedge funds’ portfolios at the end of September. JQC has seen an increase in activity from the world’s largest hedge funds of late. There were 6 hedge funds in our database with JQC positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as AK Steel Holding Corporation (NYSE:AKS), Ferro Corporation (NYSE:FOE), and Summit Hotel Properties Inc (NYSE:INN) to gather more data points.
Follow Nuveen Credit Strategies Income Fund (NYSE:JQC)
Follow Nuveen Credit Strategies Income Fund (NYSE:JQC)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Hedge fund activity in Nuveen Credit Strategies Income Fund (NYSE:JQC)
At Q3’s end, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a jump of 17% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards JQC over the last 5 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Mariner Investment Group, led by William Michaelcheck, holds the number one position in Nuveen Credit Strategies Income Fund (NYSE:JQC). Mariner Investment Group has a $7.1 million position in the stock, comprising 3.7% of its 13F portfolio. Sitting at the No. 2 spot is Ionic Capital Management, led by Bart Baum, holding a $2.1 million position. Some other professional money managers with similar optimism consist of Jim Roumell’s Roumell Asset Management, Boaz Weinstein’s Saba Capital and Mark Coe’s Coe Capital Management. We should note that Saba Capital is 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 one would reasonably expect, some big names were breaking ground themselves. Millennium Management, one of the biggest hedge funds in the world, created the most valuable position in Nuveen Credit Strategies Income Fund (NYSE:JQC). Millennium Management had $0.3 million invested in the company at the end of the quarter.
Let’s also examine hedge fund activity in other stocks similar to Nuveen Credit Strategies Income Fund (NYSE:JQC). We will take a look at AK Steel Holding Corporation (NYSE:AKS), Ferro Corporation (NYSE:FOE), Summit Hotel Properties Inc (NYSE:INN), and TTM Technologies, Inc. (NASDAQ:TTMI). This group of stocks’ market caps are similar to JQC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AKS | 33 | 219749 | 1 |
| FOE | 23 | 238284 | -5 |
| INN | 9 | 27009 | 3 |
| TTMI | 20 | 85704 | 5 |
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 $143 million. That figure was $12 million in JQC’s case. AK Steel Holding Corporation (NYSE:AKS) is the most popular stock in this table. On the other hand Summit Hotel Properties Inc (NYSE:INN) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Nuveen Credit Strategies Income Fund (NYSE:JQC) is even less popular than INN. 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 isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
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