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 first 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 4.5 years and analyze what the smart money thinks of Navient Corp (NASDAQ:NAVI) based on that data.
Navient Corp (NASDAQ:NAVI) was in 33 hedge funds’ portfolios at the end of the first quarter of 2020. NAVI investors should be aware of a decrease in hedge fund sentiment recently. There were 38 hedge funds in our database with NAVI holdings at the end of the previous quarter. Our calculations also showed that NAVI isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.
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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 51 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to view the fresh hedge fund action encompassing Navient Corp (NASDAQ:NAVI).
What have hedge funds been doing with Navient Corp (NASDAQ:NAVI)?
Heading into the second quarter of 2020, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -13% from the previous quarter. On the other hand, there were a total of 31 hedge funds with a bullish position in NAVI a year ago. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
Among these funds, Arrowstreet Capital held the most valuable stake in Navient Corp (NASDAQ:NAVI), which was worth $33 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $31.3 million worth of shares. Omega Advisors, D E Shaw, and AQR Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Omega Advisors allocated the biggest weight to Navient Corp (NASDAQ:NAVI), around 2.9% of its 13F portfolio. Prescott Group Capital Management is also relatively very bullish on the stock, dishing out 0.47 percent of its 13F equity portfolio to NAVI.
Since Navient Corp (NASDAQ:NAVI) has experienced a decline in interest from hedge fund managers, it’s safe to say that there was a specific group of hedgies who were dropping their entire stakes by the end of the third quarter. It’s worth mentioning that Joshua Friedman and Mitchell Julis’s Canyon Capital Advisors dropped the largest position of the “upper crust” of funds followed by Insider Monkey, totaling about $278.3 million in stock. Ryan Caldwell’s fund, Chiron Investment Management, also dumped its stock, about $10.6 million worth. These moves are interesting, as total hedge fund interest was cut by 5 funds by the end of the third quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Navient Corp (NASDAQ:NAVI) but similarly valued. These stocks are First Financial Bancorp (NASDAQ:FFBC), The Geo Group, Inc. (NYSE:GEO), The Chemours Company (NYSE:CC), and Monro Inc (NASDAQ:MNRO). All of these stocks’ market caps match NAVI’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 17 hedge funds with bullish positions and the average amount invested in these stocks was $104 million. That figure was $153 million in NAVI’s case. The Chemours Company (NYSE:CC) is the most popular stock in this table. On the other hand First Financial Bancorp (NASDAQ:FFBC) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Navient Corp (NASDAQ:NAVI) is more popular among hedge funds. 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 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. Unfortunately NAVI wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on NAVI were disappointed as the stock returned -1.8% during the second quarter (through the end of May) 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 most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.