Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of MDU Resources Group Inc (NYSE:MDU).
MDU Resources Group Inc (NYSE:MDU) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 21 hedge funds’ portfolios at the end of the second quarter of 2021. Our calculations also showed that MDU isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). At the end of this article we will also compare MDU to other stocks including American Eagle Outfitters Inc. (NYSE:AEO), MP Materials Corp. (NYSE:MP), and Littelfuse, Inc. (NASDAQ:LFUS) to get a better sense of its popularity.
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Noam Gottesman of GLG Partners
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Do Hedge Funds Think MDU Is A Good Stock To Buy Now?
At the end of June, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards MDU over the last 24 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in MDU Resources Group Inc (NYSE:MDU) was held by AQR Capital Management, which reported holding $50.7 million worth of stock at the end of June. It was followed by Millennium Management with a $29.4 million position. Other investors bullish on the company included GLG Partners, Citadel Investment Group, and Ancora Advisors. In terms of the portfolio weights assigned to each position Neo Ivy Capital allocated the biggest weight to MDU Resources Group Inc (NYSE:MDU), around 0.5% of its 13F portfolio. Ancora Advisors is also relatively very bullish on the stock, dishing out 0.49 percent of its 13F equity portfolio to MDU.
Since MDU Resources Group Inc (NYSE:MDU) has faced declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there were a few hedgies that decided to sell off their full holdings by the end of the second quarter. It’s worth mentioning that Phill Gross and Robert Atchinson’s Adage Capital Management sold off the largest stake of the “upper crust” of funds monitored by Insider Monkey, valued at an estimated $19 million in stock. Matthew Davis’s fund, Coann Capital, also said goodbye to its stock, about $2.5 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s also examine hedge fund activity in other stocks similar to MDU Resources Group Inc (NYSE:MDU). We will take a look at American Eagle Outfitters Inc. (NYSE:AEO), MP Materials Corp. (NYSE:MP), Littelfuse, Inc. (NASDAQ:LFUS), Thor Industries, Inc. (NYSE:THO), Endava plc (NYSE:DAVA), SYNNEX Corporation (NYSE:SNX), and Callaway Golf Company (NYSE:ELY). This group of stocks’ market values are closest to MDU’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AEO | 41 | 1875130 | -2 |
| MP | 20 | 2565580 | -9 |
| LFUS | 27 | 483266 | 6 |
| THO | 26 | 179875 | 5 |
| DAVA | 16 | 197353 | 7 |
| SNX | 20 | 629311 | 5 |
| ELY | 39 | 559436 | -1 |
| Average | 27 | 927136 | 1.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 27 hedge funds with bullish positions and the average amount invested in these stocks was $927 million. That figure was $170 million in MDU’s case. American Eagle Outfitters Inc. (NYSE:AEO) is the most popular stock in this table. On the other hand Endava plc (NYSE:DAVA) is the least popular one with only 16 bullish hedge fund positions. MDU Resources Group Inc (NYSE:MDU) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MDU is 36. 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 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 24% in 2021 through October 22nd and surpassed the market again by 1.6 percentage points. Unfortunately MDU wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); MDU investors were disappointed as the stock returned 0.2% since the end of June (through 10/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
Follow Mdu Resources Group Inc (NYSE:MDU)
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Disclosure: None. This article was originally published at Insider Monkey.
