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Hedge Funds Have Never Been This Bullish On Mesa Air Group, Inc. (MESA)

Insider Monkey finished processing more than 738 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2019. In this article we are going to take a look at smart money sentiment towards Mesa Air Group, Inc. (NASDAQ:MESA).

Is Mesa Air Group, Inc. (NASDAQ:MESA) the right pick for your portfolio? Hedge funds are becoming more confident. The number of bullish hedge fund bets went up by 6 in recent months. Our calculations also showed that mesa isn’t among the 30 most popular stocks among hedge funds. MESA was in 17 hedge funds’ portfolios at the end of the first quarter of 2019. There were 11 hedge funds in our database with MESA holdings at the end of the previous quarter.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Jeffrey Altman Owl Creek

We’re going to take a peek at the latest hedge fund action regarding Mesa Air Group, Inc. (NASDAQ:MESA).

Hedge fund activity in Mesa Air Group, Inc. (NASDAQ:MESA)

At Q1’s end, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 55% from one quarter earlier. On the other hand, there were a total of 0 hedge funds with a bullish position in MESA a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).

No of Hedge Funds with MESA Positions

According to Insider Monkey’s hedge fund database, Andy Redleaf’s Whitebox Advisors has the largest position in Mesa Air Group, Inc. (NASDAQ:MESA), worth close to $8.9 million, accounting for 0.3% of its total 13F portfolio. The second largest stake is held by Jeffrey Altman of Owl Creek Asset Management, with a $6.4 million position; 0.2% of its 13F portfolio is allocated to the company. Remaining members of the smart money with similar optimism encompass Richard Driehaus’s Driehaus Capital, Marc Lisker, Glenn Fuhrman and John Phelan’s MSDC Management and Ken Griffin’s Citadel Investment Group.

As aggregate interest increased, key money managers have jumped into Mesa Air Group, Inc. (NASDAQ:MESA) headfirst. Whitebox Advisors, managed by Andy Redleaf, assembled the biggest position in Mesa Air Group, Inc. (NASDAQ:MESA). Whitebox Advisors had $8.9 million invested in the company at the end of the quarter. Marc Lisker, Glenn Fuhrman and John Phelan’s MSDC Management also initiated a $5.5 million position during the quarter. The following funds were also among the new MESA investors: Andrew Axelrod’s Axar Capital, Chuck Royce’s Royce & Associates, and Michael Gelband’s ExodusPoint Capital.

Let’s also examine hedge fund activity in other stocks similar to Mesa Air Group, Inc. (NASDAQ:MESA). We will take a look at Midstates Petroleum Company, Inc. (NYSE:MPO), Red Lion Hotels Corporation (NYSE:RLH), NII Holdings, Inc. (NASDAQ:NIHD), and Catasys, Inc. (NASDAQ:CATS). This group of stocks’ market values resemble MESA’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MPO 18 97613 -1
RLH 11 58120 -1
NIHD 14 40636 -4
CATS 6 2276 5
Average 12.25 49661 -0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $50 million. That figure was $54 million in MESA’s case. Midstates Petroleum Company, Inc. (NYSE:MPO) is the most popular stock in this table. On the other hand Catasys, Inc. (NASDAQ:CATS) is the least popular one with only 6 bullish hedge fund positions. Mesa Air Group, Inc. (NASDAQ:MESA) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Hedge funds were also right about betting on MESA as the stock returned 11% during the same period and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.

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

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