Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 817 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about NCS Multistage Holdings, Inc. (NASDAQ:NCSM) in this article.
NCS Multistage Holdings, Inc. (NASDAQ:NCSM) investors should pay attention to a decrease in support from the world’s most elite money managers lately. NCS Multistage Holdings, Inc. (NASDAQ:NCSM) was in 4 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 10. Our calculations also showed that NCSM isn’t among the 30 most popular stocks among hedge funds (click for Q3 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.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. Keeping this in mind let’s review the fresh hedge fund action regarding NCS Multistage Holdings, Inc. (NASDAQ:NCSM).
Hedge fund activity in NCS Multistage Holdings, Inc. (NASDAQ:NCSM)
Heading into the fourth quarter of 2020, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -33% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in NCSM over the last 21 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Israel Englander’s Millennium Management has the biggest position in NCS Multistage Holdings, Inc. (NASDAQ:NCSM), worth close to $0.1 million, accounting for less than 0.1%% of its total 13F portfolio. The second largest stake is held by Renaissance Technologies, with a $0 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other members of the smart money that hold long positions comprise Paul Tudor Jones’s Tudor Investment Corp, Ken Griffin’s Citadel Investment Group and . In terms of the portfolio weights assigned to each position Tudor Investment Corp allocated the biggest weight to NCS Multistage Holdings, Inc. (NASDAQ:NCSM), around 0.0005% of its 13F portfolio. Millennium Management is also relatively very bullish on the stock, designating 0.0001 percent of its 13F equity portfolio to NCSM.
Because NCS Multistage Holdings, Inc. (NASDAQ:NCSM) has faced bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there lies a certain “tier” of hedgies that slashed their positions entirely heading into Q4. Intriguingly, Donald Sussman’s Paloma Partners said goodbye to the largest investment of all the hedgies followed by Insider Monkey, valued at an estimated $0 million in stock. Gavin Saitowitz and Cisco J. del Valle’s fund, Springbok Capital, also dropped its stock, about $0 million worth. These moves are interesting, as total hedge fund interest was cut by 2 funds heading into Q4.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as NCS Multistage Holdings, Inc. (NASDAQ:NCSM) but similarly valued. We will take a look at IRIDEX Corporation (NASDAQ:IRIX), Advaxis, Inc. (NASDAQ:ADXS), IMPAC Mortgage Holdings, Inc (NYSE:IMH), Avinger Inc (NASDAQ:AVGR), Jewett-Cameron Trading Co Ltd. (NASDAQ:JCTCF), Sotherly Hotels Inc (NASDAQ:SOHO), and ToughBuilt Industries, Inc. (NASDAQ:TBLT). This group of stocks’ market caps are closest to NCSM’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 2.7 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $0 million in NCSM’s case. IMPAC Mortgage Holdings, Inc (NYSE:IMH) is the most popular stock in this table. On the other hand Jewett-Cameron Trading Co Ltd. (NASDAQ:JCTCF) is the least popular one with only 1 bullish hedge fund positions. NCS Multistage Holdings, Inc. (NASDAQ:NCSM) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NCSM is 52.5. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. Hedge funds were also right about betting on NCSM as the stock returned 88.6% since the end of Q3 (through 11/27) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.