The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on September 30th, about a month before the elections. We at Insider Monkey have made an extensive database of more than 817 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT) based on those filings.
Is MCFT a good stock to buy now? MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT) investors should pay attention to a decrease in hedge fund sentiment in recent months. MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT) was in 17 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 22. There were 21 hedge funds in our database with MCFT positions at the end of the second quarter. Our calculations also showed that MCFT 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.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was 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’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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 15 best blue chip stocks 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 take a glance at the latest hedge fund action encompassing MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT).
Do Hedge Funds Think MCFT Is A Good Stock To Buy Now?
At Q3’s end, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -19% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards MCFT over the last 21 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Fairfax Financial Holdings held the most valuable stake in MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT), which was worth $32.7 million at the end of the third quarter. On the second spot was Divisar Capital which amassed $25.1 million worth of shares. Royce & Associates, ACK Asset Management, and Intrinsic Edge Capital 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 Divisar Capital allocated the biggest weight to MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT), around 8.3% of its 13F portfolio. ACK Asset Management is also relatively very bullish on the stock, dishing out 3.64 percent of its 13F equity portfolio to MCFT.
Judging by the fact that MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT) has witnessed a decline in interest from hedge fund managers, logic holds that there is a sect of funds that slashed their positions entirely last quarter. At the top of the heap, Brandon Osten’s Venator Capital Management dropped the largest investment of all the hedgies watched by Insider Monkey, valued at close to $2.2 million in stock, and Israel Englander’s Millennium Management was right behind this move, as the fund dropped about $1 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 4 funds last quarter.
Let’s now review hedge fund activity in other stocks similar to MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT). We will take a look at Blue Bird Corporation (NASDAQ:BLBD), Amalgamated Bank (NASDAQ:AMAL), Magenta Therapeutics, Inc. (NASDAQ:MGTA), Ituran Location and Control Ltd. (NASDAQ:ITRN), City Office REIT Inc (NYSE:CIO), Blink Charging Co. (NASDAQ:BLNK), and Seneca Foods Corp (NASDAQ:SENEA). All of these stocks’ market caps are similar to MCFT’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.6 hedge funds with bullish positions and the average amount invested in these stocks was $29 million. That figure was $109 million in MCFT’s case. Magenta Therapeutics, Inc. (NASDAQ:MGTA) is the most popular stock in this table. On the other hand Blink Charging Co. (NASDAQ:BLNK) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT) is more popular among hedge funds. Our overall hedge fund sentiment score for MCFT is 74.2. 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 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 returned 30.7% in 2020 through December 14th but still managed to beat the market by 15.8 percentage points. Hedge funds were also right about betting on MCFT as the stock returned 37% since the end of September (through 12/14) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.