Hedge Funds Aren’t Crazy About Mimecast Limited (MIME) Anymore

The Insider Monkey team has completed processing the quarterly 13F filings for the March quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Mimecast Limited (NASDAQ:MIME).

Mimecast Limited (NASDAQ:MIME) was in 24 hedge funds’ portfolios at the end of March. The all time high for this statistic is 39. MIME shareholders have witnessed a decrease in hedge fund interest of late. There were 28 hedge funds in our database with MIME positions at the end of the fourth quarter. Our calculations also showed that MIME isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Ryan Tolkin, CIO of Schonfeld Strategic Advisors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Now let’s take a look at the latest hedge fund action encompassing Mimecast Limited (NASDAQ:MIME).

Do Hedge Funds Think MIME Is A Good Stock To Buy Now?

At Q1’s end, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -14% from the previous quarter. On the other hand, there were a total of 39 hedge funds with a bullish position in MIME a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Anthony Bozza’s Lakewood Capital Management has the biggest position in Mimecast Limited (NASDAQ:MIME), worth close to $49.6 million, accounting for 2.1% of its total 13F portfolio. The second most bullish fund manager is Citadel Investment Group, managed by Ken Griffin, which holds a $44.5 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other professional money managers with similar optimism consist of Mina Faltas’s Washington Harbour Partners, Bruce Emery’s Greenvale Capital and Brian Bares’s Bares Capital Management. In terms of the portfolio weights assigned to each position Washington Harbour Partners allocated the biggest weight to Mimecast Limited (NASDAQ:MIME), around 4.45% of its 13F portfolio. Greenvale Capital is also relatively very bullish on the stock, setting aside 2.85 percent of its 13F equity portfolio to MIME.

Due to the fact that Mimecast Limited (NASDAQ:MIME) has experienced bearish sentiment from the aggregate hedge fund industry, we can see that there was a specific group of funds that slashed their full holdings last quarter. Interestingly, Mark Kingdon’s Kingdon Capital dropped the biggest stake of all the hedgies tracked by Insider Monkey, comprising an estimated $9.9 million in stock. Michel Massoud’s fund, Melqart Asset Management, also said goodbye to its stock, about $2.4 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 4 funds last quarter.

Let’s now review hedge fund activity in other stocks similar to Mimecast Limited (NASDAQ:MIME). We will take a look at Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH), MGE Energy, Inc. (NASDAQ:MGEE), Cadence Bancorporation (NYSE:CADE), Winnebago Industries, Inc. (NYSE:WGO), Uniti Group Inc. (NASDAQ:UNIT), Nova Measuring Instruments Ltd. (NASDAQ:NVMI), and Manchester United PLC (NYSE:MANU). This group of stocks’ market valuations match MIME’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DCPH 23 511975 -13
MGEE 8 37474 2
CADE 27 176068 8
WGO 30 440894 3
UNIT 17 306823 0
NVMI 16 342917 0
MANU 16 47723 5
Average 19.6 266268 0.7

View table here if you experience formatting issues.

As you can see these stocks had an average of 19.6 hedge funds with bullish positions and the average amount invested in these stocks was $266 million. That figure was $221 million in MIME’s case. Winnebago Industries, Inc. (NYSE:WGO) is the most popular stock in this table. On the other hand MGE Energy, Inc. (NASDAQ:MGEE) is the least popular one with only 8 bullish hedge fund positions. Mimecast Limited (NASDAQ:MIME) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MIME is 55.8. 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. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and still beat the market by 7.7 percentage points. Hedge funds were also right about betting on MIME as the stock returned 34.6% since the end of Q1 (through 7/16) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

Follow Mimecast Ltd (NASDAQ:MIME)

Suggested Articles:

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