Hedge funds are not perfect. They have their bad picks just like everyone else. Facebook, a stock hedge funds have loved, lost nearly 40% of its value at one point in 2018. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 15 S&P 500 stocks among hedge funds at the end of December 2018 yielded an average return of 19.7% year-to-date, vs. a gain of 13.1% for the S&P 500 Index. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of Nu Skin Enterprises, Inc. (NYSE:NUS).
Nu Skin Enterprises, Inc. (NYSE:NUS) investors should pay attention to an increase in support from the world’s most elite money managers recently. NUS was in 24 hedge funds’ portfolios at the end of December. There were 18 hedge funds in our database with NUS positions at the end of the previous quarter. Our calculations also showed that nus isn’t among the 30 most popular stocks among hedge funds.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Let’s take a look at the latest hedge fund action regarding Nu Skin Enterprises, Inc. (NYSE:NUS).
How are hedge funds trading Nu Skin Enterprises, Inc. (NYSE:NUS)?
At the end of the fourth quarter, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from the second quarter of 2018. By comparison, 19 hedge funds held shares or bullish call options in NUS a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, AQR Capital Management held the most valuable stake in Nu Skin Enterprises, Inc. (NYSE:NUS), which was worth $84 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $42.9 million worth of shares. Moreover, D E Shaw, Millennium Management, and SG Capital Management were also bullish on Nu Skin Enterprises, Inc. (NYSE:NUS), allocating a large percentage of their portfolios to this stock.
Now, some big names were breaking ground themselves. SG Capital Management, managed by Ken Grossman and Glen Schneider, established the biggest position in Nu Skin Enterprises, Inc. (NYSE:NUS). SG Capital Management had $11.3 million invested in the company at the end of the quarter. George McCabe’s Portolan Capital Management also made a $3.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Noam Gottesman’s GLG Partners, Lee Ainslie’s Maverick Capital, and Dmitry Balyasny’s Balyasny Asset Management.
Let’s check out hedge fund activity in other stocks similar to Nu Skin Enterprises, Inc. (NYSE:NUS). These stocks are Wright Medical Group N.V. (NASDAQ:WMGI), Silicon Laboratories Inc. (NASDAQ:SLAB), The Scotts Miracle-Gro Company (NYSE:SMG), and Graham Holdings Co (NYSE:GHC). This group of stocks’ market valuations are closest to NUS’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WMGI | 33 | 822338 | -2 |
| SLAB | 17 | 58266 | 3 |
| SMG | 20 | 186663 | -3 |
| GHC | 19 | 615026 | 2 |
| Average | 22.25 | 420573 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.25 hedge funds with bullish positions and the average amount invested in these stocks was $421 million. That figure was $228 million in NUS’s case. Wright Medical Group N.V. (NASDAQ:WMGI) is the most popular stock in this table. On the other hand Silicon Laboratories Inc. (NASDAQ:SLAB) is the least popular one with only 17 bullish hedge fund positions. Nu Skin Enterprises, Inc. (NYSE:NUS) is not the most popular stock in this group but hedge fund interest is still above average. 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 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately NUS wasn’t nearly as popular as these 15 stock and hedge funds that were betting on NUS were disappointed as the stock returned -20.5% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
