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Natural Resource Partners LP (NRP): Hedge Funds Are Nibbling

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Natural Resource Partners LP (NYSE:NRP).

Natural Resource Partners LP (NYSE:NRP) investors should pay attention to an increase in enthusiasm from smart money lately. NRP was in 4 hedge funds’ portfolios at the end of the first quarter of 2020. There were 3 hedge funds in our database with NRP holdings at the end of the previous quarter. Our calculations also showed that NRP isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.

To most investors, hedge funds are seen as worthless, old investment tools of years past. While there are over 8000 funds in operation at the moment, Our experts hone in on the aristocrats of this club, around 850 funds. These money managers handle bulk of all hedge funds’ total capital, and by paying attention to their finest picks, Insider Monkey has unearthed a few investment strategies that have historically outstripped Mr. Market. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

Steven Tananbaum - GoldenTree Asset Management

Steven Tananbaum of GoldenTree Asset Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to view the new hedge fund action encompassing Natural Resource Partners LP (NYSE:NRP).

Hedge fund activity in Natural Resource Partners LP (NYSE:NRP)

At the end of the first quarter, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 33% from the fourth quarter of 2019. By comparison, 5 hedge funds held shares or bullish call options in NRP a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, GoldenTree Asset Management, managed by Steven Tananbaum, holds the most valuable position in Natural Resource Partners LP (NYSE:NRP). GoldenTree Asset Management has a $6.8 million position in the stock, comprising 1.3% of its 13F portfolio. Coming in second is PEAK6 Capital Management, managed by Matthew Hulsizer, which holds a $0.5 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish encompass Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Paul Marshall and Ian Wace’s Marshall Wace LLP. In terms of the portfolio weights assigned to each position GoldenTree Asset Management allocated the biggest weight to Natural Resource Partners LP (NYSE:NRP), around 1.27% of its 13F portfolio. PEAK6 Capital Management is also relatively very bullish on the stock, earmarking 0.003 percent of its 13F equity portfolio to NRP.

With a general bullishness amongst the heavyweights, key money managers have jumped into Natural Resource Partners LP (NYSE:NRP) headfirst. PEAK6 Capital Management, managed by Matthew Hulsizer, established the biggest position in Natural Resource Partners LP (NYSE:NRP). PEAK6 Capital Management had $0.5 million invested in the company at the end of the quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Natural Resource Partners LP (NYSE:NRP) but similarly valued. These stocks are Avenue Therapeutics, Inc. (NASDAQ:ATXI), Pulse Biosciences, Inc (NASDAQ:PLSE), BayCom Corp (NASDAQ:BCML), and Fortress Biotech Inc (NASDAQ:FBIO). All of these stocks’ market caps are closest to NRP’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ATXI 3 10481 0
PLSE 2 197 1
BCML 6 16628 0
FBIO 5 5655 -3
Average 4 8240 -0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 4 hedge funds with bullish positions and the average amount invested in these stocks was $8 million. That figure was $8 million in NRP’s case. BayCom Corp (NASDAQ:BCML) is the most popular stock in this table. On the other hand Pulse Biosciences, Inc (NASDAQ:PLSE) is the least popular one with only 2 bullish hedge fund positions. Natural Resource Partners LP (NYSE:NRP) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but beat the market by 13.2 percentage points. A small number of hedge funds were also right about betting on NRP, though not to the same extent, as the stock returned 18.9% during the second quarter and outperformed the market.

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