In this article you are going to find out whether hedge funds think Navient Corp (NASDAQ:NAVI) 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 Navient Corp (NASDAQ:NAVI) a safe stock to buy now? The best stock pickers were cutting their exposure. The number of bullish hedge fund bets retreated by 5 recently. Navient Corp (NASDAQ:NAVI) was in 23 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 38. Our calculations also showed that NAVI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 28 hedge funds in our database with NAVI holdings at the end of December.
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Do Hedge Funds Think NAVI Is A Good Stock To Buy Now?
At first quarter’s end, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of -18% from the fourth quarter of 2020. By comparison, 33 hedge funds held shares or bullish call options in NAVI a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Omega Advisors was the largest shareholder of Navient Corp (NASDAQ:NAVI), with a stake worth $44.9 million reported as of the end of March. Trailing Omega Advisors was Arrowstreet Capital, which amassed a stake valued at $42.8 million. D E Shaw, AQR Capital Management, and Portolan Capital Management 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 Navient Corp (NASDAQ:NAVI), around 2.8% of its 13F portfolio. Portolan Capital Management is also relatively very bullish on the stock, designating 0.88 percent of its 13F equity portfolio to NAVI.
Since Navient Corp (NASDAQ:NAVI) has experienced a decline in interest from hedge fund managers, we can see that there lies a certain “tier” of hedgies that decided to sell off their positions entirely by the end of the first quarter. Intriguingly, Parag Vora’s HG Vora Capital Management cut the largest position of the “upper crust” of funds watched by Insider Monkey, comprising about $34.4 million in stock, and George Soros’s Soros Fund Management was right behind this move, as the fund cut about $5.1 million worth. These transactions are important to note, as total hedge fund interest was cut by 5 funds by the end of the first quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Navient Corp (NASDAQ:NAVI) but similarly valued. We will take a look at Tronox Holdings Plc (NYSE:TROX), Moog Inc (NYSE:MOG), Primo Water Corporation (NYSE:PRMW), Amicus Therapeutics, Inc. (NASDAQ:FOLD), BRP Group, Inc. (NASDAQ:BRP), Cimpress plc (NASDAQ:CMPR), and Mimecast Limited (NASDAQ:MIME). This group of stocks’ market valuations are similar to NAVI’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 25.1 hedge funds with bullish positions and the average amount invested in these stocks was $367 million. That figure was $223 million in NAVI’s case. Tronox Holdings Plc (NYSE:TROX) is the most popular stock in this table. On the other hand BRP Group, Inc. (NASDAQ:BRP) is the least popular one with only 12 bullish hedge fund positions. Navient Corp (NASDAQ:NAVI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for NAVI is 41.1. 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 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 still beat the market by 7.7 percentage points. A small number of hedge funds were also right about betting on NAVI as the stock returned 40.5% since the end of the first quarter (through 7/16) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.