The worries about the economic slowdown in China and the ongoing uncertainty about the path of interest-rate increases triggered several waves of equity sell-offs during the third quarter. Of course, most hedge funds and other asset managers had to stomach substantial losses during the bloody three-month period, which might have caused some to consider fleeing the U.S. equity markets. Interestingly, smaller-cap stocks registered higher losses than large-capitalization stocks during the September quarter, suggesting that institutional investors heavily discarded seemingly riskier equities amid high uncertainty and turmoil. In fact, the Russell 2000 Index lost 11.9% in the third quarter, while the Standard and Poor’s 500 benchmark declined a mere 6.4%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Manitex International, Inc. (NASDAQ:MNTX).
Is Manitex International, Inc. undervalued? Hedge funds are reducing their bets on the stock. The number of bullish hedge fund positions were trimmed by 1 recently. 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 Famous Dave’s of America, Inc. (NASDAQ:DAVE), ADMA Biologics Inc (NASDAQ:ADMA), and Taseko Mines Limited (USA) (NYSEMKT:TGB) to gather more data points.
In the 21st century investor’s toolkit there are a multitude of gauges shareholders can use to evaluate publicly traded companies. A duo of the best gauges are hedge fund and insider trading activity. We have shown that, historically, those who follow the top picks of the top hedge fund managers can trounce the broader indices by a healthy margin (see the details here).
Now, let’s take a glance at the key action surrounding Manitex International, Inc. (NASDAQ:MNTX).
What have hedge funds been doing with Manitex International, Inc. (NASDAQ:MNTX)?
At Q3’s end, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a drop of 13% from the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Beddow Capital Management, managed by Ed Beddow and William Tichy, holds the biggest position in Manitex International, Inc. (NASDAQ:MNTX). The fund reportedly holds a $6.7 million position in the stock, comprising 2.8% of its 13F portfolio. The second largest stake is held by Cove Street Capital, managed by Jeffrey Bronchick, which holds a $0.9 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other members of the smart money that are bullish comprise Adam Wright and Gary Kohler’s Blue Clay Capital, Charles Paquelet’s Skylands Capital and Dmitry Balyasny’s Balyasny Asset Management.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Renaissance Technologies. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because none of the 700+ hedge funds tracked by Insider Monkey identified MNTX as a viable investment and initiated a position in the stock.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Manitex International, Inc. (NASDAQ:MNTX) but similarly valued. We will take a look at Famous Dave’s of America, Inc. (NASDAQ:DAVE), ADMA Biologics Inc (NASDAQ:ADMA), Taseko Mines Limited (USA) (NYSEMKT:TGB), and XOMA Corp (NASDAQ:XOMA). This group of stocks’ market valuations are closest to MNTX’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $29 million. That figure was just $9 million in MNTX’s case. XOMA Corp (NASDAQ:XOMA) is the most popular stock in this table. On the other hand Taseko Mines Limited (USA) (NYSEMKT:TGB) is the least popular one with only 4 bullish hedge fund positions. Manitex International, Inc. (NASDAQ:MNTX) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard XOMA might be a better candidate to consider a long position.