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 New Senior Investment Group Inc (NYSE:SNR).
Is SNR a good stock to buy now? New Senior Investment Group Inc (NYSE:SNR) was in 13 hedge funds’ portfolios at the end of September. The all time high for this statistic is 20. SNR investors should be aware of an increase in hedge fund interest in recent months. There were 12 hedge funds in our database with SNR positions at the end of the second quarter. Our calculations also showed that SNR 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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 we’re going to check out the latest hedge fund action surrounding New Senior Investment Group Inc (NYSE:SNR).
Do Hedge Funds Think SNR Is A Good Stock To Buy Now?
At third quarter’s end, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of 8% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SNR over the last 21 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of New Senior Investment Group Inc (NYSE:SNR), with a stake worth $21.5 million reported as of the end of September. Trailing Renaissance Technologies was Omega Advisors, which amassed a stake valued at $20 million. Arrowstreet Capital, AQR Capital Management, and Citadel Investment Group 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 Omega Advisors allocated the biggest weight to New Senior Investment Group Inc (NYSE:SNR), around 1.96% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, dishing out 0.02 percent of its 13F equity portfolio to SNR.
Consequently, key hedge funds have been driving this bullishness. Balyasny Asset Management, managed by Dmitry Balyasny, established the biggest position in New Senior Investment Group Inc (NYSE:SNR). Balyasny Asset Management had $0.8 million invested in the company at the end of the quarter.
Let’s now take a look at hedge fund activity in other stocks similar to New Senior Investment Group Inc (NYSE:SNR). These stocks are Tiziana Life Sciences plc (NASDAQ:TLSA), Pivotal Investment Corporation II (NYSE:PIC), Legacy Housing Corporation (NASDAQ:LEGH), Gladstone Land Corporation (NASDAQ:LAND), MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT), Blue Bird Corporation (NASDAQ:BLBD), and Amalgamated Bank (NASDAQ:AMAL). This group of stocks’ market values resemble SNR’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 9.7 hedge funds with bullish positions and the average amount invested in these stocks was $35 million. That figure was $50 million in SNR’s case. MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT) is the most popular stock in this table. On the other hand Tiziana Life Sciences plc (NASDAQ:TLSA) is the least popular one with only 4 bullish hedge fund positions. New Senior Investment Group Inc (NYSE:SNR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SNR is 60.1. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. Hedge funds were also right about betting on SNR as the stock returned 47.6% since the end of Q3 (through 12/8) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.