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Hedge Funds Are Betting On MBIA Inc. (MBI)

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It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. The S&P 500 Index gained 7.6% in the 12 month-period that ended November 21, while less than 49% of its stocks beat the benchmark. In contrast, the 30 most popular mid-cap stocks among the top hedge fund investors tracked by the Insider Monkey team returned 18% over the same period, which provides evidence that these money managers do have great stock picking abilities. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like MBIA Inc. (NYSE:MBI) .

MBIA Inc. (NYSE:MBI) has seen an increase in enthusiasm from smart money lately. MBI was in 20 hedge funds’ portfolios at the end of September. There were 19 hedge funds in our database with MBI positions at the end of the previous quarter. At the end of this article we will also compare MBI to other stocks including CIRCOR International, Inc. (NYSE:CIR), Safety Insurance Group, Inc. (NASDAQ:SAFT), and MacroGenics Inc (NASDAQ:MGNX) to get a better sense of its popularity.

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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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How have hedgies been trading MBIA Inc. (NYSE:MBI)?

At Q3’s end, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a rise of 5% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in MBI over the last 5 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

MBU
According to Insider Monkey’s hedge fund database, Fine Capital Partners, led by Debra Fine, holds the number one position in MBIA Inc. (NYSE:MBI). Fine Capital Partners has a $54.7 million position in the stock, comprising 5.6% of its 13F portfolio. On Fine Capital Partners’ heels is Kahn Brothers, led by Irving Kahn, which holds a $33.8 million position; 6.1% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors that are bullish encompass Chuck Royce’s Royce & Associates, Ron Gutfleish’s Elm Ridge Capital and Emanuel J. Friedman’s EJF Capital. We should note that Elm Ridge Capital is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

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