Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Norwegian Cruise Line Holdings Ltd (NYSE:NCLH) in this article.
Is NCLH stock a buy or sell? Norwegian Cruise Line Holdings Ltd (NYSE:NCLH) shareholders have witnessed an increase in activity from the world’s largest hedge funds in recent months. Norwegian Cruise Line Holdings Ltd (NYSE:NCLH) was in 40 hedge funds’ portfolios at the end of December. The all time high for this statistic is 42. There were 26 hedge funds in our database with NCLH positions at the end of the third quarter. Our calculations also showed that NCLH isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 124 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 13% through November 17th. 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, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 10 best battery stocks to buy to identify the next stock with 10x upside potential. 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 we’re going to take a peek at the recent hedge fund action regarding Norwegian Cruise Line Holdings Ltd (NYSE:NCLH).
Do Hedge Funds Think NCLH Is A Good Stock To Buy Now?
At Q4’s end, a total of 40 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 54% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards NCLH over the last 22 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Norwegian Cruise Line Holdings Ltd (NYSE:NCLH) was held by Miller Value Partners, which reported holding $66.4 million worth of stock at the end of December. It was followed by MIG Capital with a $46.2 million position. Other investors bullish on the company included Citadel Investment Group, Ariel Investments, and Senator Investment Group. In terms of the portfolio weights assigned to each position MIG Capital allocated the biggest weight to Norwegian Cruise Line Holdings Ltd (NYSE::NCLH), around 4.18% of its 13F portfolio. Jade Capital Advisors is also relatively very bullish on the stock, setting aside 2.25 percent of its 13F equity portfolio to NCLH.
As aggregate interest increased, specific money managers were breaking ground themselves. Miller Value Partners, managed by Bill Miller, created the most outsized position in Norwegian Cruise Line Holdings Ltd (NYSE:NCLH). Miller Value Partners had $66.4 million invested in the company at the end of the quarter. Doug Silverman and Alexander Klabin’s Senator Investment Group also initiated a $25.4 million position during the quarter. The following funds were also among the new NCLH investors: Principal Global Investors’s Columbus Circle Investors, Matthew Halbower’s Pentwater Capital Management, and Robert Vincent McHugh’s Jade Capital Advisors.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Norwegian Cruise Line Holdings Ltd (NYSE:NCLH) but similarly valued. We will take a look at MINISO Group Holding Limited (NYSE:MNSO), Aegon N.V. (NYSE:AEG), Invesco Ltd. (NYSE:IVZ), Assurant, Inc. (NYSE:AIZ), Levi Strauss & Co. (NYSE:LEVI), Fate Therapeutics Inc (NASDAQ:FATE), and Mobile TeleSystems Public Joint Stock Company (NYSE:MBT). This group of stocks’ market valuations resemble NCLH’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 21.6 hedge funds with bullish positions and the average amount invested in these stocks was $727 million. That figure was $335 million in NCLH’s case. Invesco Ltd. (NYSE:IVZ) is the most popular stock in this table. On the other hand Aegon N.V. (NYSE:AEG) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Norwegian Cruise Line Holdings Ltd (NYSE:NCLH) is more popular among hedge funds. Our overall hedge fund sentiment score for NCLH is 88.6. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks returned 5.3% in 2021 through March 19th but still managed to beat the market by 0.8 percentage points. Hedge funds were also right about betting on NCLH as the stock returned 16.8% since the end of December (through 3/19) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.