National Vision Holdings, Inc. (EYE): Hedge Fund Sentiment Unchanged

Is National Vision Holdings, Inc. (NASDAQ:EYE) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.

Hedge fund interest in National Vision Holdings, Inc. (NASDAQ:EYE) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that EYE isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Cloudera, Inc. (NYSE:CLDR), PotlatchDeltic Corporation (NASDAQ:PCH), and Equitrans Midstream Corporation (NYSE:ETRN) to gather more data points.

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 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.


Paul Tudor Jones of Tudor Investment Corp

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Keeping this in mind let’s take a look at the fresh hedge fund action regarding National Vision Holdings, Inc. (NASDAQ:EYE).

Do Hedge Funds Think EYE Is A Good Stock To Buy Now?

At the end of March, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 14 hedge funds with a bullish position in EYE a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in National Vision Holdings, Inc. (NASDAQ:EYE) was held by Adage Capital Management, which reported holding $173.9 million worth of stock at the end of December. It was followed by Arrowstreet Capital with a $23.8 million position. Other investors bullish on the company included Millennium Management, Renaissance Technologies, and D E Shaw. In terms of the portfolio weights assigned to each position Adage Capital Management allocated the biggest weight to National Vision Holdings, Inc. (NASDAQ:EYE), around 0.36% of its 13F portfolio. PDT Partners is also relatively very bullish on the stock, setting aside 0.26 percent of its 13F equity portfolio to EYE.

Since National Vision Holdings, Inc. (NASDAQ:EYE) has faced falling interest from the smart money, it’s easy to see that there lies a certain “tier” of hedgies that elected to cut their positions entirely last quarter. Intriguingly, Principal Global Investors’s Columbus Circle Investors dumped the largest stake of the 750 funds monitored by Insider Monkey, worth close to $15.5 million in stock. Richard Driehaus’s fund, Driehaus Capital, also sold off its stock, about $4.4 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as National Vision Holdings, Inc. (NASDAQ:EYE) but similarly valued. These stocks are Cloudera, Inc. (NYSE:CLDR), PotlatchDeltic Corporation (NASDAQ:PCH), Equitrans Midstream Corporation (NYSE:ETRN), Applied Industrial Technologies Inc (NYSE:AIT), Diodes Incorporated (NASDAQ:DIOD), SPS Commerce, Inc. (NASDAQ:SPSC), and Bed Bath & Beyond Inc. (NASDAQ:BBBY). This group of stocks’ market values match EYE’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CLDR 30 865678 1
PCH 26 152275 3
ETRN 28 361643 3
AIT 21 67909 0
DIOD 21 161053 7
SPSC 20 133241 6
BBBY 23 314226 -10
Average 24.1 293718 1.4

View table here if you experience formatting issues.

As you can see these stocks had an average of 24.1 hedge funds with bullish positions and the average amount invested in these stocks was $294 million. That figure was $286 million in EYE’s case. Cloudera, Inc. (NYSE:CLDR) is the most popular stock in this table. On the other hand SPS Commerce, Inc. (NASDAQ:SPSC) is the least popular one with only 20 bullish hedge fund positions. National Vision Holdings, Inc. (NASDAQ:EYE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for EYE 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. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and beat the market by 7.7 percentage points. A small number of hedge funds were also right about betting on EYE, though not to the same extent, as the stock returned 13.1% since the end of Q1 (through July 16th) and outperformed the market.

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