MultiPlan Corporation (MPLN): Hedge Funds Are Snapping Up

We at Insider Monkey have gone over 866 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article, we look at what those funds think of MultiPlan Corporation (NYSE:MPLN) based on that data.

MultiPlan Corporation (NYSE:MPLN) was in 30 hedge funds’ portfolios at the end of March. The all time high for this statistic is 33. MPLN shareholders have witnessed an increase in enthusiasm from smart money lately. There were 25 hedge funds in our database with MPLN positions at the end of the fourth quarter. Our calculations also showed that MPLN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.


Louis Bacon Moore of Moore Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Keeping this in mind let’s take a peek at the new hedge fund action surrounding MultiPlan Corporation (NYSE:MPLN).

Do Hedge Funds Think MPLN Is A Good Stock To Buy Now?

At the end of the first quarter, a total of 30 of the hedge funds tracked by Insider Monkey were long this stock, a change of 20% from the previous quarter. The graph below displays the number of hedge funds with bullish position in MPLN over the last 23 quarters. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).

Is MPLN A Good Stock To Buy?

Among these funds, Leonard Green & Partners held the most valuable stake in MultiPlan Corporation (NYSE:MPLN), which was worth $213.4 million at the end of the fourth quarter. On the second spot was Magnetar Capital which amassed $49.3 million worth of shares. Arrowstreet Capital, Millennium Management, and Intrinsic Edge Capital were 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 Leonard Green & Partners allocated the biggest weight to MultiPlan Corporation (NYSE:MPLN), around 2.73% of its 13F portfolio. Birch Grove Capital is also relatively very bullish on the stock, dishing out 1.15 percent of its 13F equity portfolio to MPLN.

Now, key hedge funds have been driving this bullishness. ExodusPoint Capital, managed by Michael Gelband, established the most outsized position in MultiPlan Corporation (NYSE:MPLN). ExodusPoint Capital had $4 million invested in the company at the end of the quarter. Marc Majzner’s Clearline Capital also made a $2.8 million investment in the stock during the quarter. The following funds were also among the new MPLN investors: Eric Chen’s Antipodean Advisors, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, and Dmitry Balyasny’s Balyasny Asset Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as MultiPlan Corporation (NYSE:MPLN) but similarly valued. These stocks are LGI Homes Inc (NASDAQ:LGIH), Triton International Limited (NYSE:TRTN), Vicor Corp (NASDAQ:VICR), Datto Holding Corp. (NYSE:MSP), Scientific Games Corp (NASDAQ:SGMS), Box, Inc. (NYSE:BOX), and Inc. (NASDAQ:STMP). This group of stocks’ market caps match MPLN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
LGIH 16 80296 -7
TRTN 30 264199 7
VICR 20 88034 2
MSP 14 2729336 -3
SGMS 23 785499 0
BOX 43 863055 12
STMP 32 578028 -6
Average 25.4 769778 0.7

View table here if you experience formatting issues.

As you can see these stocks had an average of 25.4 hedge funds with bullish positions and the average amount invested in these stocks was $770 million. That figure was $329 million in MPLN’s case. Box, Inc. (NYSE:BOX) is the most popular stock in this table. On the other hand Datto Holding Corp. (NYSE:MSP) is the least popular one with only 14 bullish hedge fund positions. MultiPlan Corporation (NYSE:MPLN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MPLN is 64.9. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 22.8% in 2021 through July 2nd and still beat the market by 6 percentage points. Hedge funds were also right about betting on MPLN as the stock returned 67.9% since the end of Q1 (through 7/2) 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.