Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the second quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of Noah Holdings Limited (NYSE:NOAH) based on that data and determine whether they were really smart about the stock.
Is Noah Holdings Limited (NYSE:NOAH) a good stock to buy now? The best stock pickers were taking an optimistic view. The number of bullish hedge fund bets improved by 4 recently. Noah Holdings Limited (NYSE:NOAH) was in 18 hedge funds’ portfolios at the end of June. The all time high for this statistics is 21. Our calculations also showed that NOAH isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). There were 14 hedge funds in our database with NOAH holdings at the end of March.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most investors, hedge funds are viewed as worthless, old financial vehicles of years past. While there are over 8000 funds with their doors open at the moment, Our experts look at the aristocrats of this club, around 850 funds. These investment experts watch over the majority of the hedge fund industry’s total capital, and by observing their first-class investments, Insider Monkey has discovered several investment strategies that have historically beaten the market. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 34% since February 2017 (through August 17th) even though the market was up 53% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we are checking out this junior gold mining stock and we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. Now we’re going to view the new hedge fund action encompassing Noah Holdings Limited (NYSE:NOAH).
What does smart money think about Noah Holdings Limited (NYSE:NOAH)?
Heading into the third quarter of 2020, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 29% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in NOAH over the last 20 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Yiheng Capital, managed by Jonathan Guo, holds the biggest position in Noah Holdings Limited (NYSE:NOAH). Yiheng Capital has a $164.2 million position in the stock, comprising 8.2% of its 13F portfolio. On Yiheng Capital’s heels is Tiger Pacific Capital, managed by Run Ye, Junji Takegami and Hoyon Hwang, which holds a $69.3 million position; the fund has 17.6% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions encompass Kerr Neilson’s Platinum Asset Management, and Ted Kang’s Kylin Management. In terms of the portfolio weights assigned to each position Tiger Pacific Capital allocated the biggest weight to Noah Holdings Limited (NYSE:NOAH), around 17.62% of its 13F portfolio. Kylin Management is also relatively very bullish on the stock, dishing out 9.2 percent of its 13F equity portfolio to NOAH.
With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. Millennium Management, managed by Israel Englander, assembled the largest position in Noah Holdings Limited (NYSE:NOAH). Millennium Management had $5.3 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $2.9 million position during the quarter. The following funds were also among the new NOAH investors: Renaissance Technologies and D. E. Shaw’s D E Shaw.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Noah Holdings Limited (NYSE:NOAH) but similarly valued. These stocks are Otter Tail Corporation (NASDAQ:OTTR), Retail Properties of America Inc (NYSE:RPAI), B&G Foods, Inc. (NYSE:BGS), SITE Centers Corp. (NYSE:SITC), RLJ Lodging Trust (NYSE:RLJ), Cedar Fair, L.P. (NYSE:FUN), and NuStar Energy L.P. (NYSE:NS). This group of stocks’ market caps are similar to NOAH’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.6 hedge funds with bullish positions and the average amount invested in these stocks was $62 million. That figure was $336 million in NOAH’s case. RLJ Lodging Trust (NYSE:RLJ) is the most popular stock in this table. On the other hand NuStar Energy L.P. (NYSE:NS) is the least popular one with only 5 bullish hedge fund positions. Noah Holdings Limited (NYSE:NOAH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NOAH is 84.7. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 24.8% in 2020 through the end of September and beat the market by 19.3 percentage points. Unfortunately NOAH wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on NOAH were disappointed as the stock returned 2.4% in Q3 and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.