Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: MedEquities Realty Trust Inc (NYSE:MRT).
MedEquities Realty Trust Inc (NYSE:MRT) went public in September and in the last round of 13F filings, 14 funds from our database reported long positions in the company. 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 Northfield Bancorp Inc (NASDAQ:NFBK), Walker & Dunlop Inc. (NYSE:WD), and Atrion Corporation (NASDAQ:ATRI) to gather more data points.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
Keeping this in mind, we’re going to take a look at the fresh action encompassing MedEquities Realty Trust Inc (NYSE:MRT).
How have hedgies been trading MedEquities Realty Trust Inc (NYSE:MRT)?
As stated earlier, at the end of the third quarter, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in MRT. Let’s take a closer look at the funds that ranked among the largest shareholders at the end of September.
According to Insider Monkey’s hedge fund database, Tudor Investment Corp, led by Paul Tudor Jones, holds the largest position in MedEquities Realty Trust Inc (NYSE:MRT). Tudor Investment Corp has a $11.8 million position in the stock, comprising 0.3% of its 13F portfolio. The second largest stake is held by Millennium Management, one of the 10 largest hedge funds in the world, which holds a $11.4 million position; less than 0.1% of its 13F portfolio is allocated to the company. The other funds with substantial positions in the stock are Philip Hempleman’s Ardsley Partners, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Mark T. Gallogly’s Centerbridge Partners. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Let’s head to the next page, were we’ll see how MedEquities Realty Trust compares to other stocks with similar market caps.