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Should You Buy The Manitowoc Company, Inc. (MTW)?

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 The Manitowoc Company, Inc. (NYSE:MTW) based on that data.

The Manitowoc Company, Inc. (NYSE:MTW) shareholders have witnessed an increase in activity from the world’s largest hedge funds lately. Our calculations also showed that MTW 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.

If you’d ask most market participants, hedge funds are viewed as unimportant, old investment vehicles of years past. While there are more than 8000 funds trading today, Our researchers hone in on the top tier of this group, around 850 funds. Most estimates calculate that this group of people control bulk of the hedge fund industry’s total capital, and by shadowing their inimitable stock picks, Insider Monkey has revealed a few investment strategies that have historically outrun the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

Peter Rathjens Arrowstreet Capital 394

Peter Rathjens of Arrowstreet Capital

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 trades like this one. 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 we’re going to analyze the key hedge fund action surrounding The Manitowoc Company, Inc. (NYSE:MTW).

What have hedge funds been doing with The Manitowoc Company, Inc. (NYSE:MTW)?

Heading into the second quarter of 2020, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 24% from one quarter earlier. On the other hand, there were a total of 20 hedge funds with a bullish position in MTW a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is MTW A Good Stock To Buy?

Among these funds, Firefly Value Partners held the most valuable stake in The Manitowoc Company, Inc. (NYSE:MTW), which was worth $22.7 million at the end of the third quarter. On the second spot was Rutabaga Capital Management which amassed $4 million worth of shares. Millennium Management, Lodge Hill Capital, and Arrowstreet 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 Firefly Value Partners allocated the biggest weight to The Manitowoc Company, Inc. (NYSE:MTW), around 4.28% of its 13F portfolio. Rutabaga Capital Management is also relatively very bullish on the stock, dishing out 2.39 percent of its 13F equity portfolio to MTW.

Now, specific money managers were leading the bulls’ herd. Renaissance Technologies, created the most outsized position in The Manitowoc Company, Inc. (NYSE:MTW). Renaissance Technologies had $1.6 million invested in the company at the end of the quarter. Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors also made a $0.2 million investment in the stock during the quarter. The following funds were also among the new MTW investors: Cliff Asness’s AQR Capital Management, Noam Gottesman’s GLG Partners, and Minhua Zhang’s Weld Capital Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as The Manitowoc Company, Inc. (NYSE:MTW) but similarly valued. These stocks are MetroCity Bankshares, Inc. (NASDAQ:MCBS), Powell Industries, Inc. (NASDAQ:POWL), Barrett Business Services, Inc. (NASDAQ:BBSI), and El Pollo LoCo Holdings Inc (NASDAQ:LOCO). All of these stocks’ market caps resemble MTW’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MCBS 4 3819 0
POWL 13 33546 -5
BBSI 13 39065 1
LOCO 9 3858 -3
Average 9.75 20072 -1.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 9.75 hedge funds with bullish positions and the average amount invested in these stocks was $20 million. That figure was $44 million in MTW’s case. Powell Industries, Inc. (NASDAQ:POWL) is the most popular stock in this table. On the other hand MetroCity Bankshares, Inc. (NASDAQ:MCBS) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks The Manitowoc Company, Inc. (NYSE:MTW) is more popular among hedge funds. 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 returned 12.2% in 2020 through June 17th but still managed to beat the market by 14.8 percentage points. Hedge funds were also right about betting on MTW as the stock returned 31.3% so far in Q2 (through June 17th) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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