The elite funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at North American Energy Partners Inc.(USA) (NYSE:NOA) from the perspective of those elite funds.
Is North American Energy Partners Inc.(USA) undervalued? Investors who are in the know are in a bullish mood. The number of long hedge fund bets inched up by 1 lately. 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 Health Insurance Innovations Inc (NASDAQ:HIIQ), Spark Networks Inc (NYSEMKT:LOV), and Digirad Corporation (NASDAQ:DRAD) to gather more data points.
Now, we’re going to review the key action surrounding North American Energy Partners Inc.(USA) (NYSE:NOA).
How have hedgies been trading North American Energy Partners Inc.(USA) (NYSE:NOA)?
Heading into Q4, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from the previous quarter. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, J. Carlo Cannell’s Cannell Capital has the number one position in North American Energy Partners Inc.(USA) (NYSE:NOA), worth close to $8 million, amounting to 3% of its total 13F portfolio. The second largest stake is held by Andrew Weiss of Weiss Asset Management, with a $6.1 million position; the fund has 4.5% of its 13F portfolio invested in the stock. Other members of the smart money with similar optimism encompass Stephen Loukas, David A. Lorber, Zachary George’s FrontFour Capital Group, Jim Simons’ Renaissance Technologies and Chuck Royce’s Royce & Associates.
With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. Weiss Asset Management, managed by Andrew Weiss, assembled the most outsized position in North American Energy Partners Inc.(USA) (NYSE:NOA). Weiss Asset Management had $6.1 million invested in the company at the end of the quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as North American Energy Partners Inc.(USA) (NYSE:NOA) but similarly valued. These stocks are Health Insurance Innovations Inc (NASDAQ:HIIQ), Spark Networks Inc (NYSEMKT:LOV), Digirad Corporation (NASDAQ:DRAD), and Actinium Pharmaceuticals Inc (NYSEMKT:ATNM). All of these stocks’ market caps match NOA’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 5.5 hedge funds with bullish positions and the average amount invested in these stocks was $10 million. That figure was $20 million in NOA’s case. Spark Networks Inc (NYSEMKT:LOV) is the most popular stock in this table. On the other hand Health Insurance Innovations Inc (NASDAQ:HIIQ) is the least popular one with only 4 bullish hedge fund positions. North American Energy Partners Inc.(USA) (NYSE:NOA) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard LOV might be a better candidate to consider a long position.