In this article we will take a look at whether hedge funds think Noah Holdings Limited (NYSE:NOAH) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is NOAH a good stock to buy now? Noah Holdings Limited (NYSE:NOAH) shareholders have witnessed a decrease in enthusiasm from smart money recently. Noah Holdings Limited (NYSE:NOAH) was in 16 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 21. Our calculations also showed that NOAH 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 today’s marketplace there are a large number of signals investors have at their disposal to evaluate publicly traded companies. A duo of the best signals are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the best picks of the best investment managers can outpace the S&P 500 by a solid margin (see the details here).
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 we’re going to take a look at the key hedge fund action regarding Noah Holdings Limited (NYSE:NOAH).
Do Hedge Funds Think NOAH Is A Good Stock To Buy Now?
At third quarter’s end, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -11% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards NOAH over the last 21 quarters. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
Among these funds, Yiheng Capital held the most valuable stake in Noah Holdings Limited (NYSE:NOAH), which was worth $183 million at the end of the third quarter. On the second spot was Tiger Pacific Capital which amassed $70.7 million worth of shares. Platinum Asset Management, Marshall Wace LLP, and Two Sigma Advisors 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 Tiger Pacific Capital allocated the biggest weight to Noah Holdings Limited (NYSE:NOAH), around 17.91% of its 13F portfolio. Yiheng Capital is also relatively very bullish on the stock, designating 11.02 percent of its 13F equity portfolio to NOAH.
Because Noah Holdings Limited (NYSE:NOAH) has experienced declining sentiment from the entirety of the hedge funds we track, we can see that there is a sect of hedgies that decided to sell off their full holdings by the end of the third quarter. At the top of the heap, Israel Englander’s Millennium Management dumped the largest stake of the “upper crust” of funds watched by Insider Monkey, comprising close to $5.3 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital was right behind this move, as the fund sold off about $2.9 million worth. These transactions are important to note, as aggregate hedge fund interest fell by 2 funds by the end of the third quarter.
Let’s check out hedge fund activity in other stocks similar to Noah Holdings Limited (NYSE:NOAH). These stocks are 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS), Forward Air Corporation (NASDAQ:FWRD), Sandstorm Gold Ltd. (NYSE:SAND), Healthcare Services Group, Inc. (NASDAQ:HCSG), Owens & Minor, Inc. (NYSE:OMI), Enviva Partners, LP (NYSE:EVA), and Albany International Corp. (NYSE:AIN). This group of stocks’ market valuations are similar to NOAH’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 16.6 hedge funds with bullish positions and the average amount invested in these stocks was $120 million. That figure was $342 million in NOAH’s case. 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS) is the most popular stock in this table. On the other hand Enviva Partners, LP (NYSE:EVA) is the least popular one with only 6 bullish hedge fund positions. Noah Holdings Limited (NYSE:NOAH) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for NOAH is 55.3. 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 December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on NOAH as the stock returned 49.3% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.