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.
Morgans Hotel Group Co. (NASDAQ:MHGC) shareholders have witnessed a decrease in activity from the world’s largest hedge funds recently. MHGC was in 18 hedge funds’ portfolios at the end of the third quarter of 2015. There were 20 hedge funds in our database with MHGC positions at the end of the previous quarter. At the end of this article we will also compare MHGC to other stocks, including Roundy’s Inc (NYSE:RNDY), Cherry Hill Mortgage Investment Corp (NYSE:CHMI), and Envivio Inc (NASDAQ:ENVI) to get a better sense of its popularity.
In today’s marketplace there are several methods shareholders use to grade stocks. A pair of the less known methods are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the best picks of the elite money managers can outpace their index-focused peers by a significant margin (see the details here).
Keeping this in mind, we’re going to review the recent action encompassing Morgans Hotel Group Co. (NASDAQ:MHGC).
What does the smart money think about Morgans Hotel Group Co. (NASDAQ:MHGC)?
At Q3’s end, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a drop of 10% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Pine River Capital Management, managed by Brian Taylor, holds the number one position in Morgans Hotel Group Co. (NASDAQ:MHGC). At the end of the quarter, the fund reportedly had a $10.4 million position in the stock, comprising 0.2% of its 13F portfolio. The second largest stake is held by Gordy Holterman and Derek Dunn of Overland Advisors, with a $5 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other professional money managers that are bullish consist of Steve Tannenbaum’s Greenwood Investments, Andrew Goldman’s Seven Locks Capital Management and Mario Gabelli’s GAMCO Investors.