Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.
Murphy USA Inc (NYSE:MUSA) was in 19 hedge funds’ portfolios at the end of the third quarter of 2016. MUSA has seen a decrease in enthusiasm from smart money in recent months. There were 23 hedge funds in our database with MUSA holdings at the end of the previous quarter. At the end of this article we will also compare MUSA to other stocks including ProAssurance Corporation (NYSE:PRA), NorthWestern Corp (NYSE:NWE), and MFA Financial, Inc. (NYSE:MFA) to get a better sense of its popularity.
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.
What have hedge funds been doing with Murphy USA Inc (NYSE:MUSA)?
At Q3’s end, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, down by 17% from the second quarter of 2016. On the other hand, there were a total of 19 hedge funds with a bullish position in MUSA at the beginning of this year. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Cliff Asness of AQR Capital Management holds the most valuable position in Murphy USA Inc (NYSE:MUSA). AQR Capital Management has a $89.4 million position in the stock. Coming in second is Mario Gabelli of GAMCO Investors, with a $29.9 million position. Remaining hedge funds and institutional investors that hold long positions comprise Renaissance Technologies, one of the biggest hedge funds in the world, Wallace Weitz’s Wallace R. Weitz & Co. and D. E. Shaw’s D E Shaw. We should note that none of these hedge funds are 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.