Here is What Hedge Funds Think About National Bank Holdings Corp (NBHC)

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 National Bank Holdings Corp (NYSE:NBHC) .

National Bank Holdings Corp (NYSE:NBHC) shares didn’t see a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 10 hedge funds’ portfolios at the end of September. At the end of this article we will also compare NBHC to other stocks including Customers Bancorp Inc (NASDAQ:CUBI), PROS Holdings, Inc. (NYSE:PRO), and Washington Trust Bancorp (NASDAQ:WASH) to get a better sense of its popularity.

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.

Keeping this in mind, we’re going to view the fresh action regarding National Bank Holdings Corp (NYSE:NBHC).

What have hedge funds been doing with National Bank Holdings Corp (NYSE:NBHC)?

At the end of the third quarter, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, flat from the previous quarter. The graph below displays the number of hedge funds with bullish position in NBHC over the last 5 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Emanuel J. Friedman’s EJF Capital has the biggest position in National Bank Holdings Corp (NYSE:NBHC), worth close to $27.8 million, amounting to 2.2% of its total 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, one of the largest hedge funds in the world, holding a $24 million position. Other peers that are bullish include Mark Lee’s Forest Hill Capital, D. E. Shaw’s D E Shaw and Israel Englander’s Millennium Management. We should note that none 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.

Due to the fact that National Bank Holdings Corp (NYSE:NBHC) has experienced unchanged sentiment from hedge fund managers, we should look out for a sect of hedgies that slashed their entire stakes heading into Q4. Intriguingly, Paul Singer’s Elliott Management dumped the biggest stake of all the hedgies tracked by Insider Monkey, worth close to $48.9 million in stock. John Overdeck and David Siegel’s fund, Two Sigma Advisors, also said goodbye to its stock, about $0.4 million worth of NBHC shares.

Let’s now take a look at hedge fund activity in other stocks similar to National Bank Holdings Corp (NYSE:NBHC). These stocks are Customers Bancorp Inc (NASDAQ:CUBI), PROS Holdings, Inc. (NYSE:PRO), Washington Trust Bancorp (NASDAQ:WASH), and Inovio Pharmaceuticals Inc (NYSEAMEX:INO). This group of stocks’ market caps are similar to NBHC’s market cap.

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 $29 million. That figure was $62 million in NBHC’s case. Customers Bancorp Inc (NASDAQ:CUBI) is the most popular stock in this table. On the other hand PROS Holdings, Inc. (NYSE:PRO) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks National Bank Holdings Corp (NYSE:NBHC) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

Disclosure: None