Hedge funds and other investment firms run by legendary investors like Israel Englander, Jeffrey Talpins and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
Northwest Pipe Company (NASDAQ:NWPX) has seen an increase in hedge fund interest recently. Our calculations also showed that NWPX isn’t among the 30 most popular stocks among hedge funds.
In the eyes of most traders, hedge funds are viewed as slow, outdated financial tools of the past. While there are greater than 8000 funds trading today, Our experts hone in on the moguls of this club, about 750 funds. Most estimates calculate that this group of people oversee bulk of the smart money’s total capital, and by observing their first-class stock picks, Insider Monkey has brought to light various investment strategies that have historically outrun the S&P 500 index. Insider Monkey’s flagship hedge fund strategy defeated the S&P 500 index by around 5 percentage points per year since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
We’re going to take a glance at the fresh hedge fund action surrounding Northwest Pipe Company (NASDAQ:NWPX).
How have hedgies been trading Northwest Pipe Company (NASDAQ:NWPX)?
Heading into the second quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 43% from the fourth quarter of 2018. On the other hand, there were a total of 8 hedge funds with a bullish position in NWPX a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Northwest Pipe Company (NASDAQ:NWPX) was held by Royce & Associates, which reported holding $27.9 million worth of stock at the end of March. It was followed by Fairfax Financial Holdings with a $3.2 million position. Other investors bullish on the company included AlphaOne Capital Partners, D E Shaw, and Renaissance Technologies.
Consequently, some big names have been driving this bullishness. SG Capital Management, managed by Ken Grossman and Glen Schneider, assembled the most outsized position in Northwest Pipe Company (NASDAQ:NWPX). SG Capital Management had $1.2 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0.3 million investment in the stock during the quarter. The only other fund with a new position in the stock is Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Northwest Pipe Company (NASDAQ:NWPX) but similarly valued. We will take a look at PhaseBio Pharmaceuticals, Inc. (NASDAQ:PHAS), Galectin Therapeutics Inc. (NASDAQ:GALT), Farmland Partners Inc (NYSE:FPI), and Timberland Bancorp, Inc. (NASDAQ:TSBK). This group of stocks’ market valuations resemble NWPX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PHAS | 4 | 20675 | -2 |
| GALT | 7 | 3665 | 3 |
| FPI | 9 | 7945 | 1 |
| TSBK | 4 | 30686 | 0 |
| Average | 6 | 15743 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $16 million. That figure was $39 million in NWPX’s case. Farmland Partners Inc (NYSE:FPI) is the most popular stock in this table. On the other hand PhaseBio Pharmaceuticals, Inc. (NASDAQ:PHAS) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Northwest Pipe Company (NASDAQ:NWPX) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately NWPX wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on NWPX were disappointed as the stock returned 1.2% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
