MDC Partners Inc. (USA) (NASDAQ:MDCA) was in 6 hedge funds' portfolio at the end of March. MDCA shareholders have witnessed a decrease in activity from the world's largest hedge funds recently. There were 8 hedge funds in our database with MDCA holdings at the end of the previous quarter.
To most market participants, hedge funds are viewed as underperforming, old investment tools of yesteryear. While there are greater than 8000 funds in operation today, we hone in on the moguls of this club, about 450 funds. It is estimated that this group has its hands on most of all hedge funds' total asset base, and by tracking their best investments, we have uncovered a number of investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we've began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Equally as integral, optimistic insider trading activity is a second way to break down the investments you're interested in. As the old adage goes: there are a number of reasons for an insider to drop shares of his or her company, but just one, very obvious reason why they would behave bullishly. Various empirical studies have demonstrated the market-beating potential of this method if shareholders know what to do (learn more here).
Consequently, we're going to take a glance at the recent action encompassing MDC Partners Inc. (USA) (NASDAQ:MDCA).
At the end of the first quarter, a total of 6 of the hedge funds we track were long in this stock, a change of -25% from the first quarter. With the smart money's capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes meaningfully.
When looking at the hedgies we track, Amy Minella's Cardinal Capital had the largest position in MDC Partners Inc. (USA) (NASDAQ:MDCA), worth close to $25.4 million, accounting for 1.6% of its total 13F portfolio. Coming in second is Jonathan Kolatch of Redwood Capital Management, with a $8.1 million position; 1.2% of its 13F portfolio is allocated to the stock. Remaining hedge funds that are bullish include Jim Simons's Renaissance Technologies, D. E. Shaw's D E Shaw and Israel Englander's Millennium Management.
Seeing as MDC Partners Inc. (USA) (NASDAQ:MDCA) has experienced declining sentiment from the entirety of the hedge funds we track, it's safe to say that there exists a select few money managers who sold off their full holdings heading into Q2. Interestingly, Leon Cooperman's Omega Advisors dropped the biggest investment of the "upper crust" of funds we track, totaling close to $2.3 million in stock.. Ken Brodkowitz and Mike Vermut's fund, Newland Capital, also cut its stock, about $0.2 million worth. These moves are interesting, as aggregate hedge fund interest fell by 2 funds heading into Q2.
Bullish insider trading is most useful when the primary stock in question has experienced transactions within the past 180 days. Over the latest 180-day time frame, MDC Partners Inc. (USA) (NASDAQ:MDCA) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let's also review hedge fund and insider activity in other stocks similar to MDC Partners Inc. (USA) (NASDAQ:MDCA). These stocks are Valassis Communications, Inc. (NYSE:VCI), National CineMedia, Inc. (NASDAQ:NCMI), Constant Contact Inc (NASDAQ:CTCT), Harte-Hanks, Inc. (NYSE:HHS), and Millennial Media, Inc. (NYSE:MM). All of these stocks are in the marketing services industry and their market caps are closest to MDCA's market cap.