Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 817 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Nathan’s Famous, Inc. (NASDAQ:NATH), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is Nathan’s Famous (NATH) a good stock to buy now? NATH investors should pay attention to an increase in hedge fund interest lately. Nathan’s Famous, Inc. (NASDAQ:NATH) was in 5 hedge funds’ portfolios at the end of September. The all time high for this statistics is 7. Our calculations also showed that NATH isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
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 recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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. With all of this in mind let’s go over the new hedge fund action regarding Nathan’s Famous, Inc. (NASDAQ:NATH).
How have hedgies been trading Nathan’s Famous, Inc. (NASDAQ:NATH)?
At the end of September, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of 25% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards NATH over the last 21 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, holds the biggest position in Nathan’s Famous, Inc. (NASDAQ:NATH). Renaissance Technologies has a $12.1 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is GAMCO Investors, led by Mario Gabelli, holding a $11.9 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism contain Michael Price’s MFP Investors, Noam Gottesman’s GLG Partners and Mark Travis’s Intrepid Capital Management. In terms of the portfolio weights assigned to each position Intrepid Capital Management allocated the biggest weight to Nathan’s Famous, Inc. (NASDAQ:NATH), around 0.13% of its 13F portfolio. GAMCO Investors is also relatively very bullish on the stock, dishing out 0.13 percent of its 13F equity portfolio to NATH.
As aggregate interest increased, some big names were leading the bulls’ herd. MFP Investors, managed by Michael Price, created the biggest position in Nathan’s Famous, Inc. (NASDAQ:NATH). MFP Investors had $0.5 million invested in the company at the end of the quarter.
Let’s check out hedge fund activity in other stocks similar to Nathan’s Famous, Inc. (NASDAQ:NATH). We will take a look at Falcon Minerals Corporation (NASDAQ:FLMN), Oasis Midstream Partners LP (NASDAQ:OMP), Maui Land & Pineapple Company, Inc. (NYSE:MLP), Alpine Immune Sciences, Inc. (NASDAQ:ALPN), YRC Worldwide, Inc. (NASDAQ:YRCW), Genie Energy Ltd (NYSE:GNE), and Dyadic International, Inc. (NASDAQ:DYAI). This group of stocks’ market valuations resemble NATH’s market valuation.
|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 8.6 hedge funds with bullish positions and the average amount invested in these stocks was $20 million. That figure was $25 million in NATH’s case. Falcon Minerals Corporation (NASDAQ:FLMN) is the most popular stock in this table. On the other hand Oasis Midstream Partners LP (NASDAQ:OMP) is the least popular one with only 3 bullish hedge fund positions. Nathan’s Famous, Inc. (NASDAQ:NATH) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for NATH is 33.3. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on NATH as the stock returned 14.4% since the end of the third quarter (through 11/27) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.