Is Maui Land & Pineapple Company (MLP) A Good Stock To Buy?

At Insider Monkey, we pore over the filings of nearly 817 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Maui Land & Pineapple Company, Inc. (NYSE:MLP) makes for a good investment right now.

Maui Land & Pineapple Company, Inc. (NYSE:MLP) investors should pay attention to an increase in hedge fund interest in recent months. Maui Land & Pineapple Company, Inc. (NYSE:MLP) was in 4 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 4. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 3 hedge funds in our database with MLP holdings at the end of June. Our calculations also showed that MLP isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.

Roger Ibbotson of Zebra Capital Management

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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. With all of this in mind let’s go over the key hedge fund action regarding Maui Land & Pineapple Company, Inc. (NYSE:MLP).

Hedge fund activity in Maui Land & Pineapple Company, Inc. (NYSE:MLP)

At third quarter’s end, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 33% from the previous quarter. By comparison, 2 hedge funds held shares or bullish call options in MLP a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Charles Lemonides’s Valueworks LLC has the most valuable position in Maui Land & Pineapple Company, Inc. (NYSE:MLP), worth close to $6.1 million, corresponding to 5.1% of its total 13F portfolio. The second most bullish fund is Renaissance Technologies, which holds a $2.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism consist of Israel Englander’s Millennium Management, Roger Ibbotson’s Zebra Capital Management and . In terms of the portfolio weights assigned to each position Valueworks LLC allocated the biggest weight to Maui Land & Pineapple Company, Inc. (NYSE:MLP), around 5.12% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, setting aside 0.26 percent of its 13F equity portfolio to MLP.

Consequently, key hedge funds have been driving this bullishness. Zebra Capital Management, managed by Roger Ibbotson, initiated the most outsized position in Maui Land & Pineapple Company, Inc. (NYSE:MLP). Zebra Capital Management had $0.2 million invested in the company at the end of the quarter.

Let’s go over hedge fund activity in other stocks similar to Maui Land & Pineapple Company, Inc. (NYSE:MLP). These stocks are Alpine Immune Sciences, Inc. (NASDAQ:ALPN), YRC Worldwide, Inc. (NASDAQ:YRCW), Genie Energy Ltd (NYSE:GNE), Dyadic International, Inc. (NASDAQ:DYAI), CTO Realty Growth Inc (NYSE:CTO), Concrete Pumping Holdings, Inc. (NASDAQ:BBCP), and XOMA Corp (NASDAQ:XOMA). This group of stocks’ market values resemble MLP’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ALPN 12 81013 7
YRCW 9 8497 -1
GNE 8 11912 -2
DYAI 4 5392 1
CTO 8 17012 -4
BBCP 7 33602 0
XOMA 9 93108 -3
Average 8.1 35791 -0.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 8.1 hedge funds with bullish positions and the average amount invested in these stocks was $36 million. That figure was $9 million in MLP’s case. Alpine Immune Sciences, Inc. (NASDAQ:ALPN) is the most popular stock in this table. On the other hand Dyadic International, Inc. (NASDAQ:DYAI) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Maui Land & Pineapple Company, Inc. (NYSE:MLP) is even less popular than DYAI. Our overall hedge fund sentiment score for MLP is 36. 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. Hedge funds clearly dropped the ball on MLP as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on MLP as the stock returned 13.6% since Q3 (through November 27th) and outperformed the market by an even larger margin.

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