With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was Nokia Corporation (NYSE:NOK).
Is NOK a good stock to buy now? Nokia Corporation (NYSE:NOK) investors should pay attention to a decrease in enthusiasm from smart money of late. Nokia Corporation (NYSE:NOK) was in 21 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 27. Our calculations also showed that NOK 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 gauges market participants put to use to grade stocks. Some of the most under-the-radar gauges are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the top picks of the elite fund managers can outpace the broader indices by a solid amount (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 let’s check out the key hedge fund action regarding Nokia Corporation (NYSE:NOK).
Do Hedge Funds Think NOK Is A Good Stock To Buy Now?
At the end of September, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of -19% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards NOK over the last 21 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Nokia Corporation (NYSE:NOK) was held by Ariel Investments, which reported holding $56.8 million worth of stock at the end of September. It was followed by Tairen Capital with a $37.4 million position. Other investors bullish on the company included Fairpointe Capital, Renaissance Technologies, and Sirios Capital Management. In terms of the portfolio weights assigned to each position Tairen Capital allocated the biggest weight to Nokia Corporation (NYSE:NOK), around 4.05% of its 13F portfolio. Fairpointe Capital is also relatively very bullish on the stock, setting aside 2.23 percent of its 13F equity portfolio to NOK.
Due to the fact that Nokia Corporation (NYSE:NOK) has witnessed a decline in interest from the entirety of the hedge funds we track, it’s easy to see that there exists a select few hedgies that elected to cut their entire stakes last quarter. At the top of the heap, Ken Heebner’s Capital Growth Management dropped the largest stake of the “upper crust” of funds followed by Insider Monkey, worth about $14.5 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also sold off its stock, about $12.7 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 5 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Nokia Corporation (NYSE:NOK) but similarly valued. These stocks are GoodRx Holdings, Inc. (NASDAQ:GDRX), Barclays PLC (NYSE:BCS), Dollar Tree, Inc. (NASDAQ:DLTR), Tyson Foods, Inc. (NYSE:TSN), Schlumberger Limited. (NYSE:SLB), Corteva, Inc. (NYSE:CTVA), and GSX Techedu Inc. (NYSE:GSX). This group of stocks’ market valuations are similar to NOK’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 34.3 hedge funds with bullish positions and the average amount invested in these stocks was $820 million. That figure was $173 million in NOK’s case. Schlumberger Limited. (NYSE:SLB) is the most popular stock in this table. On the other hand Barclays PLC (NYSE:BCS) is the least popular one with only 6 bullish hedge fund positions. Nokia Corporation (NYSE:NOK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for NOK is 39.3. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 surpassed the market again by 15.8 percentage points. Unfortunately NOK wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); NOK investors were disappointed as the stock returned 2.3% since the end of September (through 12/14) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 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.