After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of June 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Radius Global Infrastructure, Inc. (NASDAQ:RADI).
Radius Global Infrastructure, Inc. (NASDAQ:RADI) was in 20 hedge funds’ portfolios at the end of June. The all time high for this statistic was previously 17. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. RADI has experienced an increase in hedge fund interest lately. There were 17 hedge funds in our database with RADI positions at the end of the first quarter. Our calculations also showed that RADI isn’t among the 30 most popular stocks among hedge funds (click for Q2 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 79 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.
Dan Loeb of Third Point
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, plant based food market is expected to explode 100-fold by 2050, so we are checking out this under-the-radar stock. We go through lists like the 10 best growth stocks to buy 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. With all of this in mind let’s take a peek at the latest hedge fund action encompassing Radius Global Infrastructure, Inc. (NASDAQ:RADI).
Do Hedge Funds Think RADI Is A Good Stock To Buy Now?
At Q2’s end, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 18% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in RADI over the last 24 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Centerbridge Partners was the largest shareholder of Radius Global Infrastructure, Inc. (NASDAQ:RADI), with a stake worth $158.4 million reported as of the end of June. Trailing Centerbridge Partners was Monarch Alternative Capital, which amassed a stake valued at $66.7 million. Eminence Capital, Third Point, and Harbor Spring 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 Centerbridge Partners allocated the biggest weight to Radius Global Infrastructure, Inc. (NASDAQ:RADI), around 14.49% of its 13F portfolio. Monarch Alternative Capital is also relatively very bullish on the stock, designating 13.73 percent of its 13F equity portfolio to RADI.
As industrywide interest jumped, key hedge funds were breaking ground themselves. Eminence Capital, managed by Ricky Sandler, assembled the biggest position in Radius Global Infrastructure, Inc. (NASDAQ:RADI). Eminence Capital had $52 million invested in the company at the end of the quarter. Amit Nitin Doshi’s Harbor Spring Capital also made a $26 million investment in the stock during the quarter. The following funds were also among the new RADI investors: Roger Keith Long’s Otter Creek Management, Renaissance Technologies, and D. E. Shaw’s D E Shaw.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Radius Global Infrastructure, Inc. (NASDAQ:RADI) but similarly valued. We will take a look at Altus Midstream Company (NASDAQ:ALTM), AMMO, Inc. (NASDAQ:POWW), Endo International plc (NASDAQ:ENDP), Lydall, Inc. (NYSE:LDL), Montauk Renewables, Inc. (NASDAQ:MNTK), Nam Tai Property Inc (NYSE:NTP), and World Acceptance Corp. (NASDAQ:WRLD). This group of stocks’ market values match RADI’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ALTM | 3 | 1506 | -1 |
| POWW | 9 | 11343 | 2 |
| ENDP | 20 | 227517 | 3 |
| LDL | 22 | 210877 | 10 |
| MNTK | 6 | 3533 | 1 |
| NTP | 3 | 144269 | -1 |
| WRLD | 6 | 128087 | -1 |
| Average | 9.9 | 103876 | 1.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.9 hedge funds with bullish positions and the average amount invested in these stocks was $104 million. That figure was $378 million in RADI’s case. Lydall, Inc. (NYSE:LDL) is the most popular stock in this table. On the other hand Altus Midstream Company (NASDAQ:ALTM) is the least popular one with only 3 bullish hedge fund positions. Radius Global Infrastructure, Inc. (NASDAQ:RADI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for RADI is 82.7. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on RADI as the stock returned 20.3% since the end of Q2 (through 10/22) 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.
