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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.
Follow Morgans Hotel Group Co. (NASDAQ:MHGC)
Follow Morgans Hotel Group Co. (NASDAQ:MHGC)
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.
Due to the fact that Morgans Hotel Group Co. (NASDAQ:MHGC) has experienced declining sentiment from the smart money, it’s easy to see that there was a specific group of money managers who were dropping their entire stakes in the third quarter. Intriguingly, Vishal Bhutani and Joshua Bederman’s Pyrrho Capital Management dropped the biggest investment of the “upper crust” of funds watched by Insider Monkey, totaling close to $2 million in stock, and Steve Pei’s Gratia Capital was right behind this move, as the fund dumped about $1.5 million worth of MHGC shares. These bearish behaviors are interesting, as total hedge fund interest dropped by 2 funds in the third quarter.
Let’s check out hedge fund activity in other stocks similar to Morgans Hotel Group Co. (NASDAQ:MHGC). We will take a look at Roundy’s Inc (NYSE:RNDY), Cherry Hill Mortgage Investment Corp (NYSE:CHMI), Envivio Inc (NASDAQ:ENVI), and Ampco-Pittsburgh Corp. (NYSE:AP). All of these stocks’ market caps resemble MHGC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RNDY | 6 | 4757 | -5 |
| CHMI | 6 | 10611 | -1 |
| ENVI | 7 | 21324 | 2 |
| AP | 7 | 22562 | 1 |
As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $15 million. That figure was significantly higher in the case of MHGC: $29 million at the end of September. Envivio Inc (NASDAQ:ENVI) and Ampco-Pittsburgh Corp. (NYSE:AP) are leading the pack, while Roundy’s Inc (NYSE:RNDY) and Cherry Hill Mortgage Investment Corp (NYSE:CHMI) are the least popular ones with only 6 bullish hedge fund positions. Compared to these stocks Morgans Hotel Group Co. (NASDAQ:MHGC) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
