Where Do Hedge Funds Stand On MVC Capital, Inc. (MVC)?

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards MVC Capital, Inc. (NYSE:MVC).

Hedge fund interest in MVC Capital, Inc. (NYSE:MVC) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that MVC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). At the end of this article we will also compare MVC to other stocks including Chemung Financial Corp. (NASDAQ:CHMG), Exterran Corporation (NYSE:EXTN), and Synchronoss Technologies, Inc. (NASDAQ:SNCR) to get a better sense of its popularity.

Video: Watch our video about the top 5 most popular hedge fund stocks.

In the financial world there are dozens of tools stock traders have at their disposal to assess stocks. Some of the less known tools are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the top fund managers can outperform the S&P 500 by a solid amount (see the details here).


Leon Cooperman of Omega Advisors

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 5 best cheap stocks to buy according to Ray Dalio to identify stocks with upside potential. 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 website. With all of this in mind let’s check out the new hedge fund action regarding MVC Capital, Inc. (NYSE:MVC).

Hedge fund activity in MVC Capital, Inc. (NYSE:MVC)

At third quarter’s end, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 9 hedge funds with a bullish position in MVC a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in MVC Capital, Inc. (NYSE:MVC) was held by Omega Advisors, which reported holding $13.3 million worth of stock at the end of September. It was followed by Wynnefield Capital with a $12.2 million position. Other investors bullish on the company included Almitas Capital, Royce & Associates, and Bulldog Investors. In terms of the portfolio weights assigned to each position Wynnefield Capital allocated the biggest weight to MVC Capital, Inc. (NYSE:MVC), around 7.58% of its 13F portfolio. Almitas Capital is also relatively very bullish on the stock, earmarking 6.46 percent of its 13F equity portfolio to MVC.

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: GAMCO Investors. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Prelude Capital (previously Springbok Capital)).

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as MVC Capital, Inc. (NYSE:MVC) but similarly valued. We will take a look at Chemung Financial Corp. (NASDAQ:CHMG), Exterran Corporation (NYSE:EXTN), Synchronoss Technologies, Inc. (NASDAQ:SNCR), Shore Bancshares, Inc. (NASDAQ:SHBI), Surgalign Holdings, Inc. (NASDAQ:SRGA), Strongbridge Biopharma plc (NASDAQ:SBBP), and Tanzanian Gold Corporation (NYSE:TRX). This group of stocks’ market valuations are similar to MVC’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CHMG 3 7400 0
EXTN 11 7114 -3
SNCR 10 6587 0
SHBI 5 19132 -1
SRGA 13 10994 2
SBBP 13 32202 3
TRX 2 189 0
Average 8.1 11945 0.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 8.1 hedge funds with bullish positions and the average amount invested in these stocks was $12 million. That figure was $38 million in MVC’s case. Surgalign Holdings, Inc. (NASDAQ:SRGA) is the most popular stock in this table. On the other hand Tanzanian Gold Corporation (NYSE:TRX) is the least popular one with only 2 bullish hedge fund positions. MVC Capital, Inc. (NYSE:MVC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MVC is 52.3. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 31.6% in 2020 through December 2nd and still beat the market by 16 percentage points. A small number of hedge funds were also right about betting on MVC as the stock returned 11.3% since the end of the third quarter (through 12/2) and outperformed the market by an even larger margin.

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