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Hedge Funds Are Buying Medical Properties Trust, Inc. (MPW)

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 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about Medical Properties Trust, Inc. (NYSE:MPW)?

Is Medical Properties Trust, Inc. (NYSE:MPW) a buy here? Money managers are getting more optimistic. The number of bullish hedge fund bets advanced by 2 recently. Our calculations also showed that MPW isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). MPW was in 16 hedge funds’ portfolios at the end of March. There were 14 hedge funds in our database with MPW positions at the end of the previous quarter.

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

In today’s marketplace there are several signals shareholders put to use to analyze stocks. A duo of the less utilized signals are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the best picks of the top investment managers can beat their index-focused peers by a solid margin (see the details here).

Richard Driehaus of Driehaus Capital

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, We take a look at lists like the 10 stocks that went up during the 2008 crash to identify the companies that are likely to deliver double digit returns in up and down markets. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a look at the fresh hedge fund action surrounding Medical Properties Trust, Inc. (NYSE:MPW).

How have hedgies been trading Medical Properties Trust, Inc. (NYSE:MPW)?

Heading into the second quarter of 2020, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 14% from the fourth quarter of 2019. On the other hand, there were a total of 13 hedge funds with a bullish position in MPW a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Medical Properties Trust, Inc. (NYSE:MPW) was held by Cardinal Capital, which reported holding $99.9 million worth of stock at the end of September. It was followed by Waterfront Capital Partners with a $22.6 million position. Other investors bullish on the company included Zimmer Partners, Intrinsic Edge Capital, and Millennium Management. In terms of the portfolio weights assigned to each position Cardinal Capital allocated the biggest weight to Medical Properties Trust, Inc. (NYSE:MPW), around 4.91% of its 13F portfolio. Waterfront Capital Partners is also relatively very bullish on the stock, dishing out 2.77 percent of its 13F equity portfolio to MPW.

Consequently, some big names were leading the bulls’ herd. Zimmer Partners, managed by Stuart J. Zimmer, initiated the most valuable position in Medical Properties Trust, Inc. (NYSE:MPW). Zimmer Partners had $13.8 million invested in the company at the end of the quarter. Richard Driehaus’s Driehaus Capital also initiated a $1.9 million position during the quarter. The following funds were also among the new MPW investors: John Overdeck and David Siegel’s Two Sigma Advisors, Michael Gelband’s ExodusPoint Capital, and Donald Sussman’s Paloma Partners.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Medical Properties Trust, Inc. (NYSE:MPW) but similarly valued. These stocks are Fair Isaac Corporation (NYSE:FICO), Elanco Animal Health Incorporated (NYSE:ELAN), NICE Ltd (NASDAQ:NICE), and Gartner Inc (NYSE:IT). This group of stocks’ market valuations are similar to MPW’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FICO 41 1225484 -4
ELAN 26 340715 3
NICE 22 373814 3
IT 32 973145 6
Average 30.25 728290 2

View table here if you experience formatting issues.

As you can see these stocks had an average of 30.25 hedge funds with bullish positions and the average amount invested in these stocks was $728 million. That figure was $165 million in MPW’s case. Fair Isaac Corporation (NYSE:FICO) is the most popular stock in this table. On the other hand NICE Ltd (NASDAQ:NICE) is the least popular one with only 22 bullish hedge fund positions. Compared to these stocks Medical Properties Trust, Inc. (NYSE:MPW) is even less popular than NICE. Hedge funds dodged a bullet by taking a bearish stance towards MPW. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.3% in 2020 through June 25th but managed to beat the market by 16.8 percentage points. Unfortunately MPW wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); MPW investors were disappointed as the stock returned 7.7% during the second quarter (through June 25th) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 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.