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Hedge Funds Have Never Been More Bullish On Mesa Laboratories, Inc. (MLAB)

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of March. At Insider Monkey, we follow nearly 750 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Mesa Laboratories, Inc. (NASDAQ:MLAB), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Is Mesa Laboratories, Inc. (NASDAQ:MLAB) a buy, sell, or hold? The smart money is in a bullish mood. The number of long hedge fund bets improved by 1 recently. Our calculations also showed that MLAB isn’t among the 30 most popular stocks among hedge funds.

According to most shareholders, hedge funds are assumed to be underperforming, old financial tools of yesteryear. While there are more than 8000 funds trading at present, Our researchers choose to focus on the top tier of this club, around 750 funds. These money managers orchestrate the majority of the hedge fund industry’s total asset base, and by shadowing their best equity investments, Insider Monkey has figured out many investment strategies that have historically exceeded the market. Insider Monkey’s flagship hedge fund strategy outrun the S&P 500 index by around 5 percentage points per annum since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).

Bruce Kovner, Caxton Associates LP

Let’s take a peek at the fresh hedge fund action encompassing Mesa Laboratories, Inc. (NASDAQ:MLAB).

Hedge fund activity in Mesa Laboratories, Inc. (NASDAQ:MLAB)

At the end of the first quarter, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 11% from the previous quarter. The graph below displays the number of hedge funds with bullish position in MLAB over the last 15 quarters. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

MLAB_jun2019

The largest stake in Mesa Laboratories, Inc. (NASDAQ:MLAB) was held by Royce & Associates, which reported holding $24 million worth of stock at the end of March. It was followed by Renaissance Technologies with a $12.4 million position. Other investors bullish on the company included Nine Ten Partners, Millennium Management, and Citadel Investment Group.

With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, initiated the most valuable position in Mesa Laboratories, Inc. (NASDAQ:MLAB). Marshall Wace LLP had $0.9 million invested in the company at the end of the quarter. Bruce Kovner’s Caxton Associates LP also made a $0.2 million investment in the stock during the quarter. The only other fund with a brand new MLAB position is Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.

Let’s check out hedge fund activity in other stocks similar to Mesa Laboratories, Inc. (NASDAQ:MLAB). We will take a look at 21Vianet Group Inc (NASDAQ:VNET), Forrester Research, Inc. (NASDAQ:FORR), Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH), and The Gorman-Rupp Company (NYSE:GRC). All of these stocks’ market caps match MLAB’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
VNET 18 45451 1
FORR 13 63228 3
DCPH 17 216366 2
GRC 7 38502 0
Average 13.75 90887 1.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $91 million. That figure was $53 million in MLAB’s case. 21Vianet Group Inc (NASDAQ:VNET) is the most popular stock in this table. On the other hand The Gorman-Rupp Company (NYSE:GRC) is the least popular one with only 7 bullish hedge fund positions. Mesa Laboratories, Inc. (NASDAQ:MLAB) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately MLAB wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); MLAB investors were disappointed as the stock returned -3.3% during the same time period 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 13 of these stocks already outperformed the market so far in Q2.

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

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