We have been waiting for this for a year and finally the third quarter ended up showing a nice bump in the performance of small-cap stocks. Both the S&P 500 and Russell 2000 were up since the end of the second quarter, but small-cap stocks outperformed the large-cap stocks by double digits. This is important for hedge funds, which are big supporters of small-cap stocks, because their investors started pulling some of their capital out due to poor recent performance. It is very likely that equity hedge funds will deliver better risk adjusted returns in the second half of this year. In this article we are going to look at how this recent market trend affected the sentiment of hedge funds towards NACCO Industries, Inc. (NYSE:NC) , and what that likely means for the prospects of the company and its stock.
Is NACCO Industries, Inc. (NYSE:NC) a healthy stock for your portfolio? Money managers are definitely getting less optimistic. The number of long hedge fund investments retreated by 2 lately. NC was in 7 hedge funds’ portfolios at the end of the third quarter of 2016. There were 9 hedge funds in our database with NC positions at the end of the previous quarter. At the end of this article we will also compare NC to other stocks including Exar Corporation (NASDAQ:EXAR), Timkensteel Corp (NYSE:TMST), and Harmonic Inc (NASDAQ:HLIT) 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.
Now, let’s take a glance at the fresh action surrounding NACCO Industries, Inc. (NYSE:NC).
What have hedge funds been doing with NACCO Industries, Inc. (NYSE:NC)?
Heading into the fourth quarter of 2016, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a change of -22% from the previous quarter. On the other hand, there were a total of 5 hedge funds with a bullish position in NC at the beginning of this year. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Howard Marks’s Oaktree Capital Management has the largest position in NACCO Industries, Inc. (NYSE:NC), worth close to $11.2 million, corresponding to 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, one of the largest hedge funds in the world, which holds a $3.7 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining members of the smart money that hold long positions contain Cliff Asness’s AQR Capital Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and John Overdeck and David Siegel’s Two Sigma Advisors. 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.