The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 817 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2020. What do these smart investors think about Maverix Metals Inc. (NYSE:MMX)?
Is MMX a good stock to buy now? Maverix Metals Inc. (NYSE:MMX) investors should pay attention to an increase in hedge fund interest of late. Maverix Metals Inc. (NYSE:MMX) was in 8 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 5. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 5 hedge funds in our database with MMX holdings at the end of June. Our calculations also showed that MMX 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.
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 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 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.
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 5 best cheap stocks to buy according to Ray Dalio to identify stocks with upside potential. 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 we’re going to take a gander at the latest hedge fund action encompassing Maverix Metals Inc. (NYSE:MMX).
How are hedge funds trading Maverix Metals Inc. (NYSE:MMX)?
At third quarter’s end, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 60% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards MMX over the last 21 quarters. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
The largest stake in Maverix Metals Inc. (NYSE:MMX) was held by Sprott Asset Management, which reported holding $82.9 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $4.5 million position. Other investors bullish on the company included Citadel Investment Group, Millennium Management, and Knoll Capital Management. In terms of the portfolio weights assigned to each position Sprott Asset Management allocated the biggest weight to Maverix Metals Inc. (NYSE:MMX), around 3.39% of its 13F portfolio. Knoll Capital Management is also relatively very bullish on the stock, dishing out 0.48 percent of its 13F equity portfolio to MMX.
As one would reasonably expect, specific money managers have been driving this bullishness. Knoll Capital Management, managed by Fred Knoll, created the most outsized position in Maverix Metals Inc. (NYSE:MMX). Knoll Capital Management had $0.6 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also initiated a $0.4 million position during the quarter. The only other fund with a new position in the stock is Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s now review hedge fund activity in other stocks similar to Maverix Metals Inc. (NYSE:MMX). These stocks are Bain Capital Specialty Finance, Inc. (NYSE:BCSF), LeMaitre Vascular Inc (NASDAQ:LMAT), Argan, Inc. (NYSE:AGX), BJ’s Restaurants, Inc. (NASDAQ:BJRI), Photronics, Inc. (NASDAQ:PLAB), American Axle & Manufacturing Holdings, Inc. (NYSE:AXL), and Nexgen Energy Ltd. (NYSE:NXE). This group of stocks’ market valuations resemble MMX’s market valuation.
|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 13.3 hedge funds with bullish positions and the average amount invested in these stocks was $41 million. That figure was $91 million in MMX’s case. American Axle & Manufacturing Holdings, Inc. (NYSE:AXL) is the most popular stock in this table. On the other hand Nexgen Energy Ltd. (NYSE:NXE) is the least popular one with only 6 bullish hedge fund positions. Maverix Metals Inc. (NYSE:MMX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MMX is 44.3. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 31.6% in 2020 through December 2nd and surpassed the market again by 16 percentage points. Unfortunately MMX wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); MMX investors were disappointed as the stock returned 6.6% since the end of September (through 12/2) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.