Is MAA Stock A Buy or Sell?

In this article you are going to find out whether hedge funds think Mid America Apartment Communities Inc (NYSE:MAA) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

Is MAA stock a buy? Mid America Apartment Communities Inc (NYSE:MAA) investors should be aware of a decrease in support from the world’s most elite money managers of late. Mid America Apartment Communities Inc (NYSE:MAA) was in 26 hedge funds’ portfolios at the end of December. The all time high for this statistic is 30. There were 27 hedge funds in our database with MAA positions at the end of the third quarter. Our calculations also showed that MAA isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Today there are several metrics investors employ to size up their stock investments. Some of the most underrated metrics are hedge fund and insider trading indicators. We have shown that, historically, those who follow the best picks of the best hedge fund managers can outclass their index-focused peers by a very impressive margin (see the details here).

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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 website. Keeping this in mind we’re going to take a look at the recent hedge fund action surrounding Mid America Apartment Communities Inc (NYSE:MAA).

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

Heading into the first quarter of 2021, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from the previous quarter. On the other hand, there were a total of 24 hedge funds with a bullish position in MAA a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Long Pond Capital was the largest shareholder of Mid America Apartment Communities Inc (NYSE:MAA), with a stake worth $76.4 million reported as of the end of December. Trailing Long Pond Capital was Fisher Asset Management, which amassed a stake valued at $38.3 million. Diamond Hill Capital, King Street Capital, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position King Street Capital allocated the biggest weight to Mid America Apartment Communities Inc (NYSE:MAA), around 4.89% of its 13F portfolio. Long Pond Capital is also relatively very bullish on the stock, setting aside 2.55 percent of its 13F equity portfolio to MAA.

Since Mid America Apartment Communities Inc (NYSE:MAA) has experienced a decline in interest from the aggregate hedge fund industry, we can see that there were a few fund managers that decided to sell off their positions entirely heading into Q1. At the top of the heap, Stuart J. Zimmer’s Zimmer Partners said goodbye to the biggest position of the “upper crust” of funds tracked by Insider Monkey, valued at close to $96.2 million in stock. Renee Yao’s fund, Neo Ivy Capital, also said goodbye to its stock, about $0.7 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 1 funds heading into Q1.

Let’s go over hedge fund activity in other stocks similar to Mid America Apartment Communities Inc (NYSE:MAA). We will take a look at Elanco Animal Health Incorporated (NYSE:ELAN), Teledyne Technologies Incorporated (NYSE:TDY), J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT), CureVac N.V. (NASDAQ:CVAC), Masco Corporation (NYSE:MAS), Gartner Inc (NYSE:IT), and Generac Holdings Inc. (NYSE:GNRC). This group of stocks’ market caps are closest to MAA’s market cap.

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As you can see these stocks had an average of 30.7 hedge funds with bullish positions and the average amount invested in these stocks was $776 million. That figure was $338 million in MAA’s case. Elanco Animal Health Incorporated (NYSE:ELAN) is the most popular stock in this table. On the other hand CureVac N.V. (NASDAQ:CVAC) is the least popular one with only 9 bullish hedge fund positions. Mid America Apartment Communities Inc (NYSE:MAA) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MAA is 55. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and still beat the market by 0.9 percentage points. A small number of hedge funds were also right about betting on MAA as the stock returned 21.7% since the end of the fourth quarter (through 4/19) and outperformed the market by an even larger margin.

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

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