Is NSA A Good Stock To Buy Now?

In this article you are going to find out whether hedge funds think National Storage Affiliates Trust (NYSE:NSA) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

Is NSA a good stock to buy now? National Storage Affiliates Trust (NYSE:NSA) investors should be aware of an increase in enthusiasm from smart money lately. National Storage Affiliates Trust (NYSE:NSA) was in 19 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 21. There were 13 hedge funds in our database with NSA positions at the end of the second quarter. Our calculations also showed that NSA 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.

Today there are numerous signals investors can use to analyze publicly traded companies. A pair of the most under-the-radar signals are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the top picks of the top hedge fund managers can trounce their index-focused peers by a solid margin (see the details here).

Jeffrey Talpins of Element Capital

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 take a gander at the fresh hedge fund action encompassing National Storage Affiliates Trust (NYSE:NSA).

Do Hedge Funds Think NSA 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 long this stock, a change of 46% from the previous quarter. On the other hand, there were a total of 17 hedge funds with a bullish position in NSA a year ago. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, holds the most valuable position in National Storage Affiliates Trust (NYSE:NSA). Renaissance Technologies has a $48.4 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second most bullish fund manager is Millennium Management, led by Israel Englander, holding a $17.8 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other peers that are bullish contain Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Matthew L Pinz’s Pinz Capital and Paul Tudor Jones’s Tudor Investment Corp. In terms of the portfolio weights assigned to each position Hill Winds Capital allocated the biggest weight to National Storage Affiliates Trust (NYSE:NSA), around 2.99% of its 13F portfolio. Pinz Capital is also relatively very bullish on the stock, designating 2.35 percent of its 13F equity portfolio to NSA.

Now, key money managers were breaking ground themselves. Pinz Capital, managed by Matthew L Pinz, assembled the most valuable position in National Storage Affiliates Trust (NYSE:NSA). Pinz Capital had $6.4 million invested in the company at the end of the quarter. Jeffrey Talpins’s Element Capital Management also made a $6 million investment in the stock during the quarter. The other funds with new positions in the stock are Benjamin A. Smith’s Laurion Capital Management, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Matthew Crandall Gilman’s Hill Winds Capital.

Let’s check out hedge fund activity in other stocks similar to National Storage Affiliates Trust (NYSE:NSA). We will take a look at IGM Biosciences, Inc. (NASDAQ:IGMS), Coca-Cola Consolidated Inc. (NASDAQ:COKE), Aimmune Therapeutics Inc (NASDAQ:AIMT), ExlService Holdings, Inc. (NASDAQ:EXLS), CVB Financial Corp. (NASDAQ:CVBF), Vishay Intertechnology, Inc. (NYSE:VSH), and CONMED Corporation (NYSE:CNMD). This group of stocks’ market valuations resemble NSA’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
IGMS 16 691434 0
COKE 12 31381 -1
AIMT 32 440174 12
EXLS 18 57117 6
CVBF 13 34209 -1
VSH 27 333332 -1
CNMD 33 286962 2
Average 21.6 267801 2.4

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 $268 million. That figure was $124 million in NSA’s case. CONMED Corporation (NYSE:CNMD) is the most popular stock in this table. On the other hand Coca-Cola Consolidated Inc. (NASDAQ:COKE) is the least popular one with only 12 bullish hedge fund positions. National Storage Affiliates Trust (NYSE:NSA) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for NSA is 53.8. 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 NSA wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); NSA investors were disappointed as the stock returned 5.2% 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.

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