The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors endured a torrid quarter, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards MDU Resources Group Inc (NYSE:MDU).
MDU Resources Group Inc (NYSE:MDU) has seen an increase in hedge fund interest of late. MDU was in 19 hedge funds' portfolios at the end of the third quarter of 2018. There were 15 hedge funds in our database with MDU positions at the end of the previous quarter. Our calculations also showed that mdu isn't among the 30 most popular stocks among hedge funds.
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 market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
Let's go over the recent hedge fund action surrounding MDU Resources Group Inc (NYSE:MDU).
Hedge fund activity in MDU Resources Group Inc (NYSE:MDU)
At the end of the third quarter, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 27% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards MDU over the last 13 quarters. With the smart money's capital changing hands, there exists a few key hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Ken Griffin's Citadel Investment Group has the biggest position in MDU Resources Group Inc (NYSE:MDU), worth close to $47.1 million, comprising less than 0.1%% of its total 13F portfolio. Coming in second is Millennium Management, managed by Israel Englander, which holds a $29.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that are bullish comprise Cliff Asness's AQR Capital Management, Jim Simons's Renaissance Technologies and Dmitry Balyasny's Balyasny Asset Management.
As aggregate interest increased, specific money managers were leading the bulls' herd. SIR Capital Management, managed by Vince Maddi and Shawn Brennan, initiated the biggest position in MDU Resources Group Inc (NYSE:MDU). SIR Capital Management had $10.6 million invested in the company at the end of the quarter. David Costen Haley's HBK Investments also initiated a $2.6 million position during the quarter. The other funds with brand new MDU positions are Michael Platt and William Reeves's BlueCrest Capital Mgmt., Bruce Kovner's Caxton Associates LP, and Alec Litowitz and Ross Laser's Magnetar Capital.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as MDU Resources Group Inc (NYSE:MDU) but similarly valued. We will take a look at Pivotal Software, Inc. (NYSE:PVTL), Stericycle Inc (NASDAQ:SRCL), Vermilion Energy Inc (NYSE:VET), and Landstar System, Inc. (NYSE:LSTR). All of these stocks' market caps are closest to MDU's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PVTL,18,314199,-3 SRCL,20,270362,-4 VET,9,32842,0 LSTR,28,269923,5 Average,18.75,221832,-0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.75 hedge funds with bullish positions and the average amount invested in these stocks was $222 million. That figure was $171 million in MDU's case. Landstar System, Inc. (NYSE:LSTR) is the most popular stock in this table. On the other hand Vermilion Energy Inc (NYSE:VET) is the least popular one with only 9 bullish hedge fund positions. MDU Resources Group Inc (NYSE:MDU) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. In this regard LSTR might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.