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Here is What Hedge Funds Think About New America High Income Fund Inc. (HYB)

The government requires hedge funds and wealthy investors with over a certain portfolio size to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings discloses the funds’ positions on September 30. We at Insider Monkey have made an extensive database of more than 700 of those elite funds and prominent investors’ filings. In this article, we analyze how these elite funds and prominent investors traded New America High Income Fund Inc. (NYSE:HYB) based on those filings.

New America High Income Fund Inc. (NYSE:HYB) has experienced an increase in activity from the world’s largest hedge funds lately. New America High Income Fund Inc. (NYSE:HYB) was in 4 hedge funds’ portfolios at the end of September. There were 3 hedge funds in our database with New America High Income Fund Inc. (NYSE:HYB) positions at the end of the previous quarter. At the end of this article, we will also compare New America High Income Fund Inc. (NYSE:HYB) to other stocks, including, Cutera, Inc. (NASDAQ:CUTR), Garnero Group Acquisition Co (NASDAQ:GGAC), and Clearfield, Inc. (NASDAQ:CLFD) to get a better sense of its popularity.

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In today’s marketplace, there is a multitude of indicators shareholders employ to assess their stock investments. Two of the best indicators are hedge fund and insider trading activity. We have shown that, historically, those who follow the top picks of the top fund managers can outperform the S&P 500 by a superb amount (see the details here).

Now, let’s review the recent action regarding New America High Income Fund Inc. (NYSE:HYB).

What does the smart money think about New America High Income Fund Inc. (NYSE:HYB)?

At the end of the third quarter, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 33% from the previous quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Third Avenue Management, managed by Martin Whitman, holds the most valuable position in New America High Income Fund Inc. (NYSE:HYB). Third Avenue Management has a $4.7 million position in the stock, comprising 0.1% of its 13F portfolio. On Third Avenue Management’s heels is Boaz Weinstein of Saba Capital, with an $1.1 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other peers with similar optimism contain Brian Taylor’s Pine River Capital Management, and Benjamin A. Smith’s Laurion Capital Management.

As industrywide interest jumped, key hedge funds have jumped into New America High Income Fund Inc. (NYSE:HYB) headfirst. Laurion Capital Management assembled the largest position in New America High Income Fund Inc. (NYSE:HYB). Laurion Capital Management had $0.1 million invested in the company at the end of the quarter.

Let’s now take a look at the hedge fund activity in other stocks similar to New America High Income Fund Inc. (NYSE:HYB). We will take a look at Cutera, Inc. (NASDAQ:CUTR), Garnero Group Acquisition Co (NASDAQ:GGAC), Clearfield, Inc. (NASDAQ:CLFD), and Old Second Bancorp Inc. (NASDAQ:OSBC). All of these stocks’ market caps match New America High Income Fund Inc. (NYSE:HYB)’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CUTR 13 43723 -3
GGAC 7 25329 1
CLFD 7 9766 2
OSBC 7 21481 2

As you can see, these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $25 million. That figure was $7 million in New America High Income Fund Inc. (NYSE:HYB)’s case. Cutera, Inc. (NASDAQ:CUTR) is the most popular stock in this table. On the other hand, Garnero Group Acquisition Co (NASDAQ:GGAC) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks, New America High Income Fund Inc. (NYSE:HYB) is even less popular than Garnero Group Acquisition Co (NASDAQ:GGAC). 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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