How do you pick the next stock to invest in? One way would be to spend days of research browsing through thousands of publicly traded companies. However, an easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of capital and have to conduct due diligence while choosing their next pick. They don’t always get it right, but, on average, their stock picks historically generated strong returns after adjusting for known risk factors. With this in mind, let’s take a look at the recent hedge fund activity surrounding Nikola Corporation (NASDAQ:NKLA) a bestëmmen ob Hedgefongen e Virdeel iwwer dës Aktie haten.
Is Nikola Corporation (NASDAQ:NKLA) a bargain? The best stock pickers were getting more optimistic. The number of long hedge fund bets advanced by 16 in recent months. Nikola Corporation (NASDAQ:NKLA) was in 29 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 13. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that NKLA isn’t among the 30 beléifsten Aktien ënner Hedgefongen (klickt fir Q2 Rankings a kuckt de Video fir e kuerze Bléck op déi Top 5 Aktien). Video: Kuckt eise Video iwwer déi Top 5 beléifste Hedgefonds Aktien.
Also, firwat gi mir op Hedge Fund Sentiment opmierksam ier mir Investitiounsentscheedunge huelen? Eis Fuerschung huet gewisen datt d'Heckefongen kleng Cap-Aktieplécke geschafft hunn de Maart mat Duebelzuelen jäerlech tëscht 1999 an 2016 ze schloën, awer d'Marge vun der Outperformance ass an de leschte Joeren erofgaang. Trotzdem konnte mir nach ëmmer am Viraus eng ausgewielte Grupp vun Hedge Fund Holdings identifizéieren déi méi wéi 500 Prozentpunkte zënter Mäerz 56 mat S&P 2017 besser waren.kuckt d'Detailer hei). Mir konnten och am Viraus eng gewielte Grupp vun Hedge Fund Holdings identifizéieren déi de Maart mat 10 Prozentpunkte jäerlech tëscht 2006 an 2017 ënnersträicht. Interessant ass d'Mark vun Ënnerperformance vun dësen Aktien an de leschte Joeren eropgaang. Investisseuren, déi laang um Maart sinn a kuerz dës Aktien hätte méi wéi 27% jäerlech tëscht 2015 an 2017 zréck. Mir hunn d'Lëscht vun dësen Aktien zënter Februar 2017 an eisem Véierel Newsletter verfollegt an deelt. Och wann Dir net bequem sidd mat Shorting Aktien, sollt Dir op d'mannst vermeiden laang Positiounen un Aktien unzefänken, déi an eisem kuerzen Portfolio sinn.
De Scott Bessent vu Key Square Capital Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, this “mom” trader turned $2000 into $2 million within 2 years. So, we are checking out her best trade idea of the month. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 meeschte rentabel Firmen in the world 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. Keeping this in mind let’s take a glance at the latest hedge fund action encompassing Nikola Corporation (NASDAQ:NKLA).
Hedge fund activity in Nikola Corporation (NASDAQ:NKLA)
At the end of the second quarter, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 123% from the previous quarter. On the other hand, there were a total of 13 hedge funds with a bullish position in NKLA a year ago. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
Ënnert dëse Fongen, ValueAct Capital held the most valuable stake in Nikola Corporation (NASDAQ:NKLA), which was worth $788.4 million at the end of the third quarter. On the second spot was Key Square Capital Management which amassed $135.1 million worth of shares. Citadel Investment Group, Hudson Bay Capital Management, and Luxor Capital Group 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 Key Square Capital Management allocated the biggest weight to Nikola Corporation (NASDAQ:NKLA), around 32% of its 13F portfolio. Beryl Capital Management is also relatively very bullish on the stock, dishing out 12.83 percent of its 13F equity portfolio to NKLA.
As aggregate interest increased, key money managers were leading the bulls’ herd. ValueAct Capital, managed by Jeffrey Ubben, established the biggest position in Nikola Corporation (NASDAQ:NKLA). ValueAct Capital had $788.4 million invested in the company at the end of the quarter. Scott Bessent’s Key Square Capital Management also made a $135.1 million investment in the stock during the quarter. The following funds were also among the new NKLA investors: Sander Gerber’s Hudson Bay Capital Management, Christian Leone’s Luxor Capital Group, and David Alexander Witkin’s Beryl Capital Management.
Let’s go over hedge fund activity in other stocks similar to Nikola Corporation (NASDAQ:NKLA). We will take a look at Marathon Petroleum Corp (NYSE:MPC), Ford Motor Company (NYSE:F), Prudential Financial Inc (NYSE:PRU), Consolidated Edison, Inc. (NYSE:ED), Valero Energy Corporation (NYSE:VLO), Xilinx, Inc. (NASDAQ:XLNX), an TransDigm Group Incorporated (NYSE:TDG). This group of stocks’ market caps match NKLA’s market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MPC,62,1444528,5 F,30,791591,-3 PRU,26,437049,-2 ED,31,714139,6 VLO,39,157343,-6 XLNX,47,1054542,9 TDG,62,6065530,4 Average,42.4,1523532,1.9 [/table]
Gesinn Dësch hei wann Dir Problemer mat Formatéieren.
As you can see these stocks had an average of 42.4 hedge funds with bullish positions and the average amount invested in these stocks was $1524 million. That figure was $1382 million in NKLA’s case. Marathon Petroleum Corp (NYSE:MPC) is the most popular stock in this table. On the other hand Prudential Financial Inc (NYSE:PRU) is the least popular one with only 26 bullish hedge fund positions. Nikola Corporation (NASDAQ:NKLA) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for NKLA is 44.2. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that Top 10 beléifste Aktien among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 23.8% in 2020 through September 14th and surpassed the market by 17.6 percentage points. Unfortunately NKLA wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); NKLA investors were disappointed as the stock returned -47% since Q2 and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the Top 10 beléifste Aktien ënner Hedgefongen well déi meescht vun dësen Aktien scho um Maart méi wäit waren.
Kritt Echtzäit E-Mail Alarmer: Follegt Nikola Corp (NASDAQ:NKLA)
Offenbarung: Keen. Dësen Artikel gouf ursprénglech am Insider Monkey.