How do you pick the next stock to invest in? One way would be to spend hours of research browsing through thousands of publicly traded companies. However, an easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of capital and have to conduct due diligence while choosing their next pick. They don’t always get it right, but, on average, their stock picks historically generated strong returns after adjusting for known risk factors. With this in mind, let’s take a look at the recent hedge fund activity surrounding Macquarie Infrastructure Company LLC (NYSE:MIC).
Is Macquarie Infrastructure Company LLC (NYSE:MIC) a bargain? Hedge funds are becoming less hopeful. The number of long hedge fund bets was trimmed by 11 lately. MIC was in 58 hedge funds’ portfolios at the end of the fourth quarter of 2015. There were 69 hedge funds in our database with MIC positions at the end of the previous quarter. 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 Helmerich & Payne, Inc. (NYSE:HP), Carlisle Companies, Inc. (NYSE:CSL), and VimpelCom Ltd (ADR) (NYSE:VIP) to gather more data points.
In the 21st century investor’s toolkit there are several indicators investors have at their disposal to assess publicly traded companies. Some of the less known indicators are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the best picks of the elite hedge fund managers can beat their index-focused peers by a significant amount (see the details here).
Macquarie Infrastructure’s stock has declined by more than 21% over the last 52 weeks. For the last year, the company reported revenue of $1.64 billion, higher than the $1.35 billion posted for 2014. At the same time, it generated a loss of $1.69 per share and declared a dividend of $1.15 per share for the fourth quarter, which translates into an annualized dividend of $4.60 per share, giving its stock a yield of 7.36%. “We are pleased to have grown our dividend in excess of our guidance,” MIC’s CEO James Hooke was quoted as saying in a statement. For the current year, the company expects to further increase its dividend to the range between $5.00 and $5.10 per share.
Keeping this in mind, we’re going to review the key action surrounding Macquarie Infrastructure Company LLC (NYSE:MIC).