After several tireless days we have finished crunching the numbers from nearly 817 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Mistras Group, Inc. (NYSE:MG).
Is MG a good stock to buy now? Mistras Group, Inc. (NYSE:MG) has experienced an increase in support from the world’s most elite money managers of late. Mistras Group, Inc. (NYSE:MG) was in 12 hedge funds’ portfolios at the end of September. The all time high for this statistics is 15. There were 11 hedge funds in our database with MG positions at the end of the second quarter. Our calculations also showed that MG 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.
If you’d ask most investors, hedge funds are assumed to be unimportant, outdated financial vehicles of years past. While there are greater than 8000 funds in operation at the moment, Our experts choose to focus on the moguls of this club, approximately 850 funds. These hedge fund managers oversee the lion’s share of the smart money’s total asset base, and by monitoring their first-class picks, Insider Monkey has come up with a number of investment strategies that have historically beaten Mr. Market. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
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 peek at the fresh hedge fund action surrounding Mistras Group, Inc. (NYSE:MG).
Do Hedge Funds Think MG Is A Good Stock To Buy Now?
At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 9% from one quarter earlier. By comparison, 15 hedge funds held shares or bullish call options in MG a year ago. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
The largest stake in Mistras Group, Inc. (NYSE:MG) was held by Royce & Associates, which reported holding $4.1 million worth of stock at the end of September. It was followed by Invenomic Capital Management with a $1.9 million position. Other investors bullish on the company included D E Shaw, Arrowstreet Capital, and Two Sigma Advisors. In terms of the portfolio weights assigned to each position Invenomic Capital Management allocated the biggest weight to Mistras Group, Inc. (NYSE:MG), around 1.05% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, dishing out 0.04 percent of its 13F equity portfolio to MG.
As industrywide interest jumped, some big names were leading the bulls’ herd. Paloma Partners, managed by Donald Sussman, initiated the most outsized position in Mistras Group, Inc. (NYSE:MG). Paloma Partners had $0.1 million invested in the company at the end of the quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Mistras Group, Inc. (NYSE:MG) but similarly valued. We will take a look at StoneMor Inc. (NYSE:STON), Community Bankers Trust Corp. (NASDAQ:ESXB), HC2 Holdings Inc (NYSE:HCHC), 9 Meters Biopharma, Inc. (NASDAQ:NMTR), Ferroglobe PLC (NASDAQ:GSM), MTBC, Inc. (NASDAQ:MTBC), and StealthGas Inc. (NASDAQ:GASS). This group of stocks’ market values match MG’s market value.
|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 5.9 hedge funds with bullish positions and the average amount invested in these stocks was $25 million. That figure was $10 million in MG’s case. HC2 Holdings Inc (NYSE:HCHC) is the most popular stock in this table. On the other hand StoneMor Inc. (NYSE:STON) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Mistras Group, Inc. (NYSE:MG) is more popular among hedge funds. Our overall hedge fund sentiment score for MG is 80. 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 32.9% in 2020 through December 8th but still managed to beat the market by 16.2 percentage points. Hedge funds were also right about betting on MG as the stock returned 67% since the end of September (through 12/8) 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.