Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Northern Technologies International Corp (NASDAQ:NTIC).
Northern Technologies International Corp (NASDAQ:NTIC) has seen a decrease in hedge fund interest lately. Northern Technologies International Corp (NASDAQ:NTIC) was in 3 hedge funds’ portfolios at the end of March. The all time high for this statistic is 6. Our calculations also showed that NTIC isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. 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. With all of this in mind we’re going to take a gander at the latest hedge fund action encompassing Northern Technologies International Corp (NASDAQ:NTIC).
Do Hedge Funds Think NTIC Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -40% from the previous quarter. By comparison, 4 hedge funds held shares or bullish call options in NTIC a year ago. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
Among these funds, Rutabaga Capital Management held the most valuable stake in Northern Technologies International Corp (NASDAQ:NTIC), which was worth $5.2 million at the end of the fourth quarter. On the second spot was Renaissance Technologies which amassed $2.4 million worth of shares. Corsair Capital Management was 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 Rutabaga Capital Management allocated the biggest weight to Northern Technologies International Corp (NASDAQ:NTIC), around 2.39% of its 13F portfolio. Corsair Capital Management is also relatively very bullish on the stock, earmarking 0.11 percent of its 13F equity portfolio to NTIC.
Since Northern Technologies International Corp (NASDAQ:NTIC) has faced bearish sentiment from hedge fund managers, we can see that there lies a certain “tier” of fund managers that slashed their full holdings in the first quarter. Interestingly, Thomas E. Lynch’s Mill Road Capital Management dropped the largest stake of the “upper crust” of funds watched by Insider Monkey, valued at about $0.6 million in stock. James Bitzer’s fund, Falcon Point Capital, also dumped its stock, about $0.3 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 2 funds in the first quarter.
Let’s check out hedge fund activity in other stocks similar to Northern Technologies International Corp (NASDAQ:NTIC). These stocks are Powerbridge Technologies Co., Ltd. (NASDAQ:PBTS), FIRST FINANCIAL NORTHWEST, INC. (NASDAQ:FFNW), Aytu BioScience, Inc. (NASDAQ:AYTU), BioSig Technologies, Inc. (NASDAQ:BSGM), Peoples Bancorp of North Carolina, Inc. (NASDAQ:PEBK), PFSweb, Inc. (NASDAQ:PFSW), and Brainstorm Cell Therapeutics Inc. (NASDAQ:BCLI). This group of stocks’ market valuations match NTIC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PBTS | 2 | 109 | 1 |
| FFNW | 4 | 10608 | 0 |
| AYTU | 7 | 14594 | 3 |
| BSGM | 3 | 273 | 2 |
| PEBK | 2 | 6890 | 0 |
| PFSW | 6 | 19733 | -1 |
| BCLI | 5 | 2305 | -2 |
| Average | 4.1 | 7787 | 0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 4.1 hedge funds with bullish positions and the average amount invested in these stocks was $8 million. That figure was $8 million in NTIC’s case. Aytu BioScience, Inc. (NASDAQ:AYTU) is the most popular stock in this table. On the other hand Powerbridge Technologies Co., Ltd. (NASDAQ:PBTS) is the least popular one with only 2 bullish hedge fund positions. Northern Technologies International Corp (NASDAQ:NTIC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for NTIC is 28. 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 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. A small number of hedge funds were also right about betting on NTIC as the stock returned 15.5% since the end of the first quarter (through 6/11) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
