Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 750 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Nuvectra Corporation (NASDAQ:NVTR) in this article.
Is Nuvectra Corporation (NASDAQ:NVTR) a buy right now? Investors who are in the know are getting less optimistic. The number of long hedge fund bets went down by 4 lately. Our calculations also showed that NVTR isn’t among the 30 most popular stocks among hedge funds.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
We’re going to view the fresh hedge fund action encompassing Nuvectra Corporation (NASDAQ:NVTR).
What have hedge funds been doing with Nuvectra Corporation (NASDAQ:NVTR)?
At Q1’s end, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from the fourth quarter of 2018. The graph below displays the number of hedge funds with bullish position in NVTR over the last 15 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, J. Carlo Cannell’s Cannell Capital has the most valuable position in Nuvectra Corporation (NASDAQ:NVTR), worth close to $8 million, comprising 1.9% of its total 13F portfolio. The second largest stake is held by Millennium Management, led by Israel Englander, holding a $6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions encompass Samuel Isaly’s OrbiMed Advisors, Noam Gottesman’s GLG Partners and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Judging by the fact that Nuvectra Corporation (NASDAQ:NVTR) has witnessed falling interest from the entirety of the hedge funds we track, it’s safe to say that there exists a select few funds who sold off their full holdings by the end of the third quarter. Interestingly, Richard Driehaus’s Driehaus Capital dropped the biggest stake of all the hedgies followed by Insider Monkey, comprising about $11 million in stock, and Daniel Lascano’s Lomas Capital Management was right behind this move, as the fund cut about $5.9 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 4 funds by the end of the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Nuvectra Corporation (NASDAQ:NVTR). These stocks are Millendo Therapeutics, Inc. (NASDAQ:MLND), American Realty Investors, Inc. (NYSE:ARL), Norwood Financial Corp. (NASDAQ:NWFL), and Wrap Technologies, Inc. (NASDAQ:WRTC). All of these stocks’ market caps are similar to NVTR’s market cap.
|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 3.5 hedge funds with bullish positions and the average amount invested in these stocks was $13 million. That figure was $26 million in NVTR’s case. Millendo Therapeutics, Inc. (NASDAQ:MLND) is the most popular stock in this table. On the other hand American Realty Investors, Inc. (NYSE:ARL) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Nuvectra Corporation (NASDAQ:NVTR) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately NVTR wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on NVTR were disappointed as the stock returned -65.5% during the same period 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 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published at Insider Monkey.