Do Hedge Funds Love Studio City International Holdings Limited (MSC)?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 817 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2020. What do these smart investors think about Studio City International Holdings Limited (NYSE:MSC)?

Hedge fund interest in Studio City International Holdings Limited (NYSE:MSC) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that MSC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). 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 Four Corners Property Trust, Inc. (NYSE:FCPT), Coeur Mining, Inc. (NYSE:CDE), and Jack in the Box Inc. (NASDAQ:JACK) to gather more data points.

Video: Watch our video about the top 5 most popular hedge fund stocks.

To most traders, hedge funds are assumed to be unimportant, old financial vehicles of years past. While there are over 8000 funds trading at the moment, Our researchers choose to focus on the leaders of this group, approximately 850 funds. It is estimated that this group of investors administer bulk of all hedge funds’ total capital, and by shadowing their finest picks, Insider Monkey has unearthed numerous investment strategies that have historically beaten Mr. Market. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .


Israel Englander of Millennium Management

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website.Now we’re going to take a gander at the key hedge fund action encompassing Studio City International Holdings Limited (NYSE:MSC).

How are hedge funds trading Studio City International Holdings Limited (NYSE:MSC)?

At the end of the third quarter, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in MSC over the last 21 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Studio City International Holdings Limited (NYSE:MSC) was held by Silver Point Capital, which reported holding $250.4 million worth of stock at the end of September. It was followed by Redwood Capital Management with a $26.1 million position. The only other hedge fund that is bullish on the company was Millennium Management.

Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Studio City International Holdings Limited (NYSE:MSC) but similarly valued. We will take a look at Four Corners Property Trust, Inc. (NYSE:FCPT), Coeur Mining, Inc. (NYSE:CDE), Jack in the Box Inc. (NASDAQ:JACK), Grupo Aeroportuario del Centro Nort (NASDAQ:OMAB), Cerence Inc. (NASDAQ:CRNC), Assured Guaranty Ltd. (NYSE:AGO), and AtriCure Inc. (NASDAQ:ATRC). This group of stocks’ market values match MSC’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FCPT 13 67476 -6
CDE 15 44740 1
JACK 38 314788 7
OMAB 7 28689 3
CRNC 12 135180 -2
AGO 27 205479 2
ATRC 21 224194 -2
Average 19 145792 0.4

View table here if you experience formatting issues.

As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $146 million. That figure was $278 million in MSC’s case. Jack in the Box Inc. (NASDAQ:JACK) is the most popular stock in this table. On the other hand Grupo Aeroportuario del Centro Nort (NASDAQ:OMAB) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Studio City International Holdings Limited (NYSE:MSC) is even less popular than OMAB. Our overall hedge fund sentiment score for MSC is 23. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Hedge funds dodged a bullet by taking a bearish stance towards MSC. Our calculations showed that the top 20 most popular hedge fund stocks returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 28.1% in 2020 through November 23rd but managed to beat the market again by 15.4 percentage points. Unfortunately MSC wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); MSC investors were disappointed as the stock returned -9.8% since the end of the third quarter (through 11/23) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.

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Disclosure: None. This article was originally published at Insider Monkey.