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Maiden Holdings, Ltd. (MHLD): Hedge Funds In Wait-and-See Mode

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. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of Maiden Holdings, Ltd. (NASDAQ:MHLD).

Maiden Holdings, Ltd. (NASDAQ:MHLD) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 7 hedge funds’ portfolios at the end of March. 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 Research Frontiers, Inc. (NASDAQ:REFR), Hallmark Financial Services, Inc. (NASDAQ:HALL), and Catabasis Pharmaceuticals Inc (NASDAQ:CATB) to gather more data points. Our calculations also showed that MHLD isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.

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AQR CAPITAL MANAGEMENT

Cliff Asness of AQR Capital Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. 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 the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a glance at the fresh hedge fund action encompassing Maiden Holdings, Ltd. (NASDAQ:MHLD).

Hedge fund activity in Maiden Holdings, Ltd. (NASDAQ:MHLD)

At Q1’s end, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in MHLD over the last 18 quarters. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

Is MHLD A Good Stock To Buy?

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ari Zweiman’s 683 Capital Partners has the biggest position in Maiden Holdings, Ltd. (NASDAQ:MHLD), worth close to $7.2 million, amounting to 0.8% of its total 13F portfolio. Coming in second is  Renaissance Technologies, with a $0.7 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other peers that are bullish include Israel Englander’s Millennium Management, John Overdeck and David Siegel’s Two Sigma Advisors and Cliff Asness’s AQR Capital Management. In terms of the portfolio weights assigned to each position 683 Capital Partners allocated the biggest weight to Maiden Holdings, Ltd. (NASDAQ:MHLD), around 0.85% of its 13F portfolio. Millennium Management is also relatively very bullish on the stock, setting aside 0.0012 percent of its 13F equity portfolio to MHLD.

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 first 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 also examine hedge fund activity in other stocks – not necessarily in the same industry as Maiden Holdings, Ltd. (NASDAQ:MHLD) but similarly valued. These stocks are Research Frontiers, Inc. (NASDAQ:REFR), Hallmark Financial Services, Inc. (NASDAQ:HALL), Catabasis Pharmaceuticals Inc (NASDAQ:CATB), and Research Solutions, Inc (NASDAQ:RSSS). This group of stocks’ market valuations are closest to MHLD’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
REFR 2 123 1
HALL 12 8859 0
CATB 7 2611 1
RSSS 1 22697 1
Average 5.5 8573 0.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 5.5 hedge funds with bullish positions and the average amount invested in these stocks was $9 million. That figure was $9 million in MHLD’s case. Hallmark Financial Services, Inc. (NASDAQ:HALL) is the most popular stock in this table. On the other hand Research Solutions, Inc (NASDAQ:RSSS) is the least popular one with only 1 bullish hedge fund positions. Maiden Holdings, Ltd. (NASDAQ:MHLD) is not the most popular stock in this group but hedge fund interest is still above average. 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 13.9% in 2020 through June 10th but still beat the market by 14.2 percentage points. Hedge funds were also right about betting on MHLD as the stock returned 38.5% in Q2 (through June 10th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.