The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Novanta Inc. (NASDAQ:NOVT).
Is NOVT a good stock to buy now? The smart money was becoming more confident. The number of bullish hedge fund bets advanced by 1 in recent months. Novanta Inc. (NASDAQ:NOVT) was in 19 hedge funds’ portfolios at the end of September. The all time high for this statistic is 19. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that NOVT 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 the eyes of most investors, hedge funds are seen as worthless, old financial vehicles of years past. While there are greater than 8000 funds with their doors open at present, Our experts hone in on the masters of this group, about 850 funds. Most estimates calculate that this group of people watch over the lion’s share of the smart money’s total asset base, and by tracking their unrivaled stock picks, Insider Monkey has unearthed many investment strategies that have historically outpaced the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
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. Keeping this in mind let’s take a look at the key hedge fund action encompassing Novanta Inc. (NASDAQ:NOVT).
Do Hedge Funds Think NOVT Is A Good Stock To Buy Now?
At the end of September, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in NOVT over the last 21 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.
Among these funds, Paradice Investment Management held the most valuable stake in Novanta Inc. (NASDAQ:NOVT), which was worth $58.9 million at the end of the third quarter. On the second spot was Arrowstreet Capital which amassed $20.3 million worth of shares. Marshall Wace LLP, Thames Capital Management, and Renaissance Technologies 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 Paradice Investment Management allocated the biggest weight to Novanta Inc. (NASDAQ:NOVT), around 4.27% of its 13F portfolio. Thames Capital Management is also relatively very bullish on the stock, earmarking 2.27 percent of its 13F equity portfolio to NOVT.
Consequently, key money managers were leading the bulls’ herd. Millennium Management, managed by Israel Englander, assembled the most valuable position in Novanta Inc. (NASDAQ:NOVT). Millennium Management had $1.3 million invested in the company at the end of the quarter. Benjamin A. Smith’s Laurion Capital Management also made a $0.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Paul Tudor Jones’s Tudor Investment Corp, Donald Sussman’s Paloma Partners, and Ken Griffin’s Citadel Investment Group.
Let’s also examine hedge fund activity in other stocks similar to Novanta Inc. (NASDAQ:NOVT). These stocks are Ternium S.A. (NYSE:TX), National Fuel Gas Company (NYSE:NFG), Ballard Power Systems Inc. (NASDAQ:BLDP), Turning Point Therapeutics, Inc. (NASDAQ:TPTX), Equitrans Midstream Corporation (NYSE:ETRN), Amicus Therapeutics, Inc. (NASDAQ:FOLD), and ONE Gas Inc (NYSE:OGS). This group of stocks’ market values resemble NOVT’s market value.
|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 $381 million. That figure was $112 million in NOVT’s case. Amicus Therapeutics, Inc. (NASDAQ:FOLD) is the most popular stock in this table. On the other hand Ternium S.A. (NYSE:TX) is the least popular one with only 8 bullish hedge fund positions. Novanta Inc. (NASDAQ:NOVT) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for NOVT is 54.3. 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 NOVT as the stock returned 16.8% 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.