Hedge Funds Are Selling NV5 Global Inc (NVEE)

In this article we will check out the progression of hedge fund sentiment towards NV5 Global Inc (NASDAQ:NVEE) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

Is NV5 Global Inc (NASDAQ:NVEE) a buy, sell, or hold? The smart money was in a pessimistic mood. The number of bullish hedge fund bets went down by 6 in recent months. NV5 Global Inc (NASDAQ:NVEE) was in 10 hedge funds’ portfolios at the end of June. The all time high for this statistic is 16. Our calculations also showed that NVEE isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 16 hedge funds in our database with NVEE positions at the end of the first quarter.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Cruiser Capital Advisors' Returns, AUM and Holdings

Keith Rosenbloom of Cruiser Capital Advisors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind let’s review the fresh hedge fund action encompassing NV5 Global Inc (NASDAQ:NVEE).

Do Hedge Funds Think NVEE Is A Good Stock To Buy Now?

At second quarter’s end, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of -38% from the first quarter of 2020. By comparison, 7 hedge funds held shares or bullish call options in NVEE a year ago. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

The largest stake in NV5 Global Inc (NASDAQ:NVEE) was held by Driehaus Capital, which reported holding $14.1 million worth of stock at the end of June. It was followed by Skylands Capital with a $10.1 million position. Other investors bullish on the company included Royce & Associates, Cruiser Capital Advisors, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Cruiser Capital Advisors allocated the biggest weight to NV5 Global Inc (NASDAQ:NVEE), around 3.68% of its 13F portfolio. Skylands Capital is also relatively very bullish on the stock, designating 1.19 percent of its 13F equity portfolio to NVEE.

Seeing as NV5 Global Inc (NASDAQ:NVEE) has witnessed bearish sentiment from the smart money, it’s safe to say that there were a few hedgies that decided to sell off their full holdings heading into Q3. Interestingly, Ira Unschuld’s Brant Point Investment Management said goodbye to the largest stake of all the hedgies followed by Insider Monkey, comprising about $5.1 million in stock. Matthew L Pinz’s fund, Pinz Capital, also said goodbye to its stock, about $4.8 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 6 funds heading into Q3.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as NV5 Global Inc (NASDAQ:NVEE) but similarly valued. These stocks are Astec Industries, Inc. (NASDAQ:ASTE), Uxin Limited (NASDAQ:UXIN), The Greenbrier Companies Inc (NYSE:GBX), Middlesex Water Company (NASDAQ:MSEX), BioAtla, Inc. (NASDAQ:BCAB), Genesis Energy, L.P. (NYSE:GEL), and Sculptor Capital Management, Inc. (NYSE:SCU). All of these stocks’ market caps are closest to NVEE’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ASTE 10 68019 -2
UXIN 8 22686 5
GBX 16 48718 0
MSEX 8 60277 0
BCAB 10 326787 -3
GEL 5 8254 0
SCU 19 100642 2
Average 10.9 90769 0.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 10.9 hedge funds with bullish positions and the average amount invested in these stocks was $91 million. That figure was $41 million in NVEE’s case. Sculptor Capital Management, Inc. (NYSE:SCU) is the most popular stock in this table. On the other hand Genesis Energy, L.P. (NYSE:GEL) is the least popular one with only 5 bullish hedge fund positions. NV5 Global Inc (NASDAQ:NVEE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for NVEE is 35.6. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 25.7% in 2021 through September 27th and still beat the market by 6.2 percentage points. A small number of hedge funds were also right about betting on NVEE as the stock returned 9.7% since the end of the second quarter (through 9/27) and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.