Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those elite funds in these small-cap stocks. In the following paragraphs, we analyze The Medicines Company (NASDAQ:MDCO) from the perspective of those elite funds.
Is The Medicines Company (NASDAQ:MDCO) an exceptional investment today? The smart money is taking an optimistic view. The number of bullish hedge fund positions went up by 1 lately. MDCO was in 27 hedge funds’ portfolios at the end of the third quarter of 2016. There were 26 hedge funds in our database with MDCO positions at the end of the previous quarter. 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 SolarCity Corp (NASDAQ:SCTY), Owens & Minor, Inc. (NYSE:OMI), and Fulton Financial Corp (NASDAQ:FULT) to gather more data points.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
How are hedge funds trading The Medicines Company (NASDAQ:MDCO)?
At the end of the third quarter, a total of 27 of the hedge funds tracked by Insider Monkey were bullish on this stock, a gain of 4% from the second quarter of 2016, as hedge fund ownership of MDCO continues to trend upward. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Keith Meister’s Corvex Capital has the biggest position in The Medicines Company (NASDAQ:MDCO), worth close to $116.5 million, corresponding to 2.2% of its total 13F portfolio. Sitting at the No. 2 spot is Roberto Mignone of Bridger Management, with a $79.2 million position; the fund has 5.3% of its 13F portfolio invested in the stock. Other members of the smart money with similar optimism include Stephen DuBois’ Camber Capital Management, Alex Denner’s Sarissa Capital Management, and Christopher James’ Partner Fund Management.