Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the first quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of NuStar Energy L.P. (NYSE:NS) based on that data.
Is NuStar Energy L.P. (NYSE:NS) a buy, sell, or hold? Money managers are becoming less hopeful. The number of long hedge fund bets went down by 3 in recent months. Our calculations also showed that NS 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). NS was in 4 hedge funds' portfolios at the end of the first quarter of 2020. There were 7 hedge funds in our database with NS holdings at the end of the previous quarter. Video: Watch our video about the top 5 most popular hedge fund stocks.
If you'd ask most investors, hedge funds are viewed as underperforming, outdated investment vehicles of years past. While there are more than 8000 funds in operation at present, Our researchers look at the crème de la crème of this club, approximately 850 funds. It is estimated that this group of investors orchestrate most of the hedge fund industry's total asset base, and by watching their finest equity investments, Insider Monkey has formulated a few investment strategies that have historically defeated Mr. Market. Insider Monkey's flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points a year 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 .
[caption id="attachment_26340" align="aligncenter" width="399"] Ken Griffin of Citadel Investment Group[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like this one. 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 take a gander at the recent hedge fund action surrounding NuStar Energy L.P. (NYSE:NS).
Hedge fund activity in NuStar Energy L.P. (NYSE:NS)
At Q1's end, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of -43% from the previous quarter. By comparison, 1 hedge funds held shares or bullish call options in NS a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, holds the number one position in NuStar Energy L.P. (NYSE:NS). Arrowstreet Capital has a $6.8 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Arrowstreet Capital's heels is Marshall Wace LLP, led by Paul Marshall and Ian Wace, holding a $0.8 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other members of the smart money that are bullish comprise Matthew Hulsizer's PEAK6 Capital Management, and Matthew Hulsizer's PEAK6 Capital Management. In terms of the portfolio weights assigned to each position Heronetta Management allocated the biggest weight to NuStar Energy L.P. (NYSE:NS), around 0.18% of its 13F portfolio. Arrowstreet Capital is also relatively very bullish on the stock, designating 0.02 percent of its 13F equity portfolio to NS.
Since NuStar Energy L.P. (NYSE:NS) has witnessed a decline in interest from the aggregate hedge fund industry, it's easy to see that there is a sect of hedgies that elected to cut their full holdings heading into Q4. It's worth mentioning that Mark Coe's Intrinsic Edge Capital dropped the biggest stake of all the hedgies tracked by Insider Monkey, worth close to $6.6 million in stock. Ken Griffin's fund, Citadel Investment Group, also said goodbye to its stock, about $2.5 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 3 funds heading into Q4.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as NuStar Energy L.P. (NYSE:NS) but similarly valued. We will take a look at ATN International, Inc. (NASDAQ:ATNI), SecureWorks Corp. (NASDAQ:SCWX), Winnebago Industries, Inc. (NYSE:WGO), and CareDx, Inc. (NASDAQ:CDNA). This group of stocks' market caps are similar to NS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ATNI,8,59085,-1 SCWX,11,11882,-3 WGO,19,131961,-4 CDNA,17,144703,-8 Average,13.75,86908,-4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $87 million. That figure was $8 million in NS's case. Winnebago Industries, Inc. (NYSE:WGO) is the most popular stock in this table. On the other hand ATN International, Inc. (NASDAQ:ATNI) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks NuStar Energy L.P. (NYSE:NS) is even less popular than ATNI. Hedge funds clearly dropped the ball on NS as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. 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 and still beat the market by 13.2 percentage points. A small number of hedge funds were also right about betting on NS as the stock returned 108.9% so far in the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.