It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 5.2% over the 12-month period ending October 30, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored S&P 500 stocks by the hedge funds monitored by Insider Monkey (as of September 2014) generated a return of 9.5% over the same time span, with 63% of these stocks outperforming the benchmark. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized in financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in Medidata Solutions Inc (NASDAQ:MDSO).
Hedge fund interest in Medidata Solutions Inc (NASDAQ:MDSO) shares was flat at the end of last quarter. This is usually a negative indicator. 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 PriceSmart, Inc. (NASDAQ:PSMT), The Timken Company (NYSE:TKR), and Domtar Corp (USA) (NYSE:UFS) to gather more data points.
At the moment there are a lot of formulas market participants can use to appraise publicly traded companies. Some of the most underrated formulas are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the top picks of the best hedge fund managers can beat the S&P 500 by a solid margin (see the details here).
With all of this in mind, we’re going to take a gander at the new action regarding Medidata Solutions Inc (NASDAQ:MDSO).
How are hedge funds trading Medidata Solutions Inc (NASDAQ:MDSO)?
At Q3’s end, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the second quarter. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Polar Capital, managed by Brian Ashford-Russell and Tim Woolley, holds the biggest position in Medidata Solutions Inc (NASDAQ:MDSO). Polar Capital has a $17.7 million position in the stock, comprising 0.4% of its 13F portfolio. Sitting at the No. 2 spot is ShearLink Capital, managed by Vivek Mehta and Aaron Husock, which holds a $16.3 million position; 7.2% of its 13F portfolio is allocated to the stock. Other members of the smart money that are bullish contain Nick Niell’s Arrowgrass Capital Partners, Drew Cupps’s Cupps Capital Management and Chuck Royce’s Royce & Associates.