There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other successful funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Medallion Financial Corp (NASDAQ:MFIN).
Medallion Financial Corp (NASDAQ:MFIN) registered an increase in enthusiasm from smart money investors from our database last quarter. There were seven funds in our database with MFIN holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as BIOLASE Inc (NASDAQ:BIOL), Nabriva Therapeutics AG-ADR (NASDAQ:NBRV), and Crown Crafts, Inc. (NASDAQ:CRWS) to gather more data points.
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.
Now, let’s analyze the key action regarding Medallion Financial Corp (NASDAQ:MFIN).
Hedge fund activity in Medallion Financial Corp (NASDAQ:MFIN)
At the end of the third quarter, seven funds tracked by Insider Monkey held long positions in this stock, up by one from one quarter earlier. The graph below displays the number of hedge funds with bullish position in MFIN over the last five quarters. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Bernard Selz’s Selz Capital has the biggest position in Medallion Financial Corp (NASDAQ:MFIN), worth close to $2 million, comprising 0.5% of its total 13F portfolio. Sitting at the No. 2 spot is GAMCO Investors, led by Mario Gabelli, holding a $0.5 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that are bullish contain Murray Stahl’s Horizon Asset Management, John Overdeck and David Siegel’s Two Sigma Advisors, and Ken Griffin’s Citadel Investment Group. 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.