Is Northern Oil & Gas, Inc. (NOG) A Good Stock To Buy?

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Northern Oil & Gas, Inc. (NYSE:NOG).

Northern Oil & Gas, Inc. (NYSE:NOG) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 19 hedge funds’ portfolios at the end of September. At the end of this article we will also compare NOG to other stocks including Lakeland Bancorp, Inc. (NASDAQ:LBAI), Benefitfocus Inc (NASDAQ:BNFT), and Twist Bioscience Corporation (NASDAQ:TWST) to get a better sense of its popularity.
5 Most Popular Stocks Among Hedge Funds
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Today there are numerous formulas investors use to analyze stocks. A couple of the less known formulas are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the best picks of the elite investment managers can trounce their index-focused peers by a healthy amount (see the details here).

Matthew Hulsizer PEAK6 Capital

Matthew Hulsizer of PEAK6 Capital

Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. We’re going to view the latest hedge fund action surrounding Northern Oil & Gas, Inc. (NYSE:NOG).

Hedge fund activity in Northern Oil & Gas, Inc. (NYSE:NOG)

Heading into the fourth quarter of 2019, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the second quarter of 2019. Below, you can check out the change in hedge fund sentiment towards NOG over the last 17 quarters. So, let’s check out 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, Angelo Gordon & Co, managed by John M. Angelo and Michael L. Gordon, holds the most valuable position in Northern Oil & Gas, Inc. (NYSE:NOG). Angelo Gordon & Co has a $62.3 million position in the stock, comprising 8% of its 13F portfolio. On Angelo Gordon & Co’s heels is Portolan Capital Management, managed by George McCabe, which holds a $17.4 million position; 2% of its 13F portfolio is allocated to the stock. Some other members of the smart money with similar optimism include Dmitry Balyasny’s Balyasny Asset Management, Brett Hendrickson’s Nokomis Capital and Vince Maddi and Shawn Brennan’s SIR Capital Management. In terms of the portfolio weights assigned to each position Angelo Gordon & Co allocated the biggest weight to Northern Oil & Gas, Inc. (NYSE:NOG), around 7.95% of its 13F portfolio. Meghalaya Partners is also relatively very bullish on the stock, designating 3.33 percent of its 13F equity portfolio to NOG.

Judging by the fact that Northern Oil & Gas, Inc. (NYSE:NOG) has witnessed declining sentiment from the smart money, logic holds that there is a sect of hedgies that decided to sell off their full holdings by the end of the third quarter. It’s worth mentioning that Steve Cohen’s Point72 Asset Management cut the biggest investment of all the hedgies followed by Insider Monkey, totaling close to $3.9 million in stock, and Charles Davidson and Joseph Jacobs’s Wexford Capital was right behind this move, as the fund dumped about $3.3 million worth. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Northern Oil & Gas, Inc. (NYSE:NOG) but similarly valued. We will take a look at Lakeland Bancorp, Inc. (NASDAQ:LBAI), Benefitfocus Inc (NASDAQ:BNFT), Twist Bioscience Corporation (NASDAQ:TWST), and ArcBest Corp (NASDAQ:ARCB). This group of stocks’ market valuations are similar to NOG’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
LBAI 12 34546 1
BNFT 14 30746 -1
TWST 10 67289 1
ARCB 14 75592 -2
Average 12.5 52043 -0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.5 hedge funds with bullish positions and the average amount invested in these stocks was $52 million. That figure was $136 million in NOG’s case. Benefitfocus Inc (NASDAQ:BNFT) is the most popular stock in this table. On the other hand Twist Bioscience Corporation (NASDAQ:TWST) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Northern Oil & Gas, Inc. (NYSE:NOG) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately NOG wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on NOG were disappointed as the stock returned -9.2% during the first two months of the fourth quarter 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 70 percent of these stocks already outperformed the market in Q4.

Disclosure: None. This article was originally published at Insider Monkey.