Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Mitcham Industries, Inc. (NASDAQ:MIND) based on that data.
Hedge fund interest in Mitcham Industries, Inc. (NASDAQ:MIND) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare MIND to other stocks including Pacific Ethanol Inc (NASDAQ:PEIX), Continental Materials Corporation (NYSE:CUO), and Supercom Ltd (NASDAQ:SPCB) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 72% since March 2017 and outperformed the S&P 500 ETFs by more than 44 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Matthew Hulsizer of PEAK6 Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to take a glance at the recent hedge fund action surrounding Mitcham Industries, Inc. (NASDAQ:MIND).
What does smart money think about Mitcham Industries, Inc. (NASDAQ:MIND)?
At the end of the first quarter, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. By comparison, 4 hedge funds held shares or bullish call options in MIND a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
Among these funds, Ariel Investments held the most valuable stake in Mitcham Industries, Inc. (NASDAQ:MIND), which was worth $3.6 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $0.4 million worth of shares. PEAK6 Capital Management was 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 Ariel Investments allocated the biggest weight to Mitcham Industries, Inc. (NASDAQ:MIND), around 0.06% of its 13F portfolio. PEAK6 Capital Management is also relatively very bullish on the stock, earmarking 0.0005 percent of its 13F equity portfolio to MIND.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Mitcham Industries, Inc. (NASDAQ:MIND) but similarly valued. We will take a look at Pacific Ethanol Inc (NASDAQ:PEIX), Continental Materials Corporation (NYSE:CUO), Supercom Ltd (NASDAQ:SPCB), and Ra Medical Systems, Inc. (NYSE:RMED). This group of stocks’ market valuations are closest to MIND’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PEIX | 3 | 766 | 0 |
| CUO | 2 | 906 | 0 |
| SPCB | 1 | 108 | 0 |
| RMED | 2 | 459 | 0 |
| Average | 2 | 560 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 2 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $4 million in MIND’s case. Pacific Ethanol Inc (NASDAQ:PEIX) is the most popular stock in this table. On the other hand Supercom Ltd (NASDAQ:SPCB) is the least popular one with only 1 bullish hedge fund positions. Mitcham Industries, Inc. (NASDAQ:MIND) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 7.9% in 2020 through May 22nd but beat the market by 15.6 percentage points. Unfortunately MIND wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on MIND were disappointed as the stock returned -8% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.
