Medidata Solutions Inc (MDSO): Are Hedge Funds Right About This Stock?

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Medidata Solutions Inc (NASDAQ:MDSO) has seen an increase in activity from the world’s largest hedge funds lately. MDSO was in 16 hedge funds’ portfolios at the end of September. There were 9 hedge funds in our database with MDSO holdings at the end of the previous quarter. At the end of this article we will also compare MDSO to other stocks including Penske Automotive Group, Inc. (NYSE:PAG), RLJ Lodging Trust (NYSE:RLJ), and MB Financial, Inc. (NASDAQ:MBFI) to get a better sense of its popularity.

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What have hedge funds been doing with Medidata Solutions Inc (NASDAQ:MDSO)?

At the end of the third quarter, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a gain of 78% from the second quarter of 2016. By comparison, 13 hedge funds held shares or bullish call options in MDSO heading into this year. So, let’s see 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, Polar Capital, led by Brian Ashford-Russell and Tim Woolley, holds the biggest position in Medidata Solutions Inc (NASDAQ:MDSO). Polar Capital has a $32.6 million position in the stock. The second most bullish fund manager is Israel Englander’s Millennium Management, which holds a $13.9 million call position. Other hedge funds and institutional investors that are bullish contain Chuck Royce’s Royce & Associates, Nick Niell’s Arrowgrass Capital Partners 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.

As aggregate interest increased, key money managers have jumped into Medidata Solutions Inc (NASDAQ:MDSO) headfirst. Millennium Management initiated the most valuable call position in Medidata Solutions Inc (NASDAQ:MDSO). Drew Cupps’ Cupps Capital Management also initiated a $2.6 million position during the quarter. The other funds with new positions in the stock are Phil Frohlich’s Prescott Group Capital Management, and Brian Taylor’s Pine River Capital Management.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Medidata Solutions Inc (NASDAQ:MDSO) but similarly valued. We will take a look at Penske Automotive Group, Inc. (NYSE:PAG), RLJ Lodging Trust (NYSE:RLJ), MB Financial, Inc. (NASDAQ:MBFI), and QTS Realty Trust Inc (NYSE:QTS). All of these stocks’ market caps match MDSO’s market cap.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $96 million. That figure was $84 million in MDSO’s case. QTS Realty Trust Inc (NYSE:QTS) is the most popular stock in this table. On the other hand RLJ Lodging Trust (NYSE:RLJ) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Medidata Solutions Inc (NASDAQ:MDSO) 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.

Disclosure: None