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The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
Is MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT) undervalued? Hedge funds were getting more optimistic. The number of long hedge fund positions inched up by 1 recently. MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT) was in 21 hedge funds' portfolios at the end of the second quarter of 2020. The all time high for this statistics is 22. Our calculations also showed that MCFT isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). There were 20 hedge funds in our database with MCFT positions at the end of the first quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are several indicators investors use to analyze publicly traded companies. A duo of the less utilized indicators are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the top picks of the top hedge fund managers can outpace the market by a very impressive margin (see the details here).
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 precious metals prices. So, we are checking out this lithium company which could also benefit from the electric car adoption. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 to get excerpts of these letters in your inbox. With all of this in mind let's analyze the new hedge fund action surrounding MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT).
How are hedge funds trading MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT)?
Heading into the third quarter of 2020, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of 5% from the first quarter of 2020. By comparison, 17 hedge funds held shares or bullish call options in MCFT a year ago. With hedgies' sentiment swirling, there exists a few key hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
The largest stake in MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT) was held by Fairfax Financial Holdings, which reported holding $35.5 million worth of stock at the end of September. It was followed by Divisar Capital with a $33.5 million position. Other investors bullish on the company included Royce & Associates, ACK Asset Management, and Intrinsic Edge Capital. In terms of the portfolio weights assigned to each position Divisar Capital allocated the biggest weight to MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT), around 9.7% of its 13F portfolio. ACK Asset Management is also relatively very bullish on the stock, setting aside 3.31 percent of its 13F equity portfolio to MCFT.
Now, key money managers were breaking ground themselves. Intrinsic Edge Capital, managed by Mark Coe, created the largest position in MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT). Intrinsic Edge Capital had $4.9 million invested in the company at the end of the quarter. Brandon Osten's Venator Capital Management also initiated a $2.2 million position during the quarter. The other funds with new positions in the stock are Brian C. Freckmann's Lyon Street Capital, Israel Englander's Millennium Management, and Ken Grossman and Glen Schneider's SG Capital Management.
Let's check out hedge fund activity in other stocks similar to MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT). We will take a look at CarParts.com, Inc. (NASDAQ:PRTS), Navigator Holdings Ltd (NYSE:NVGS), Loop Industries, Inc. (NASDAQ:LOOP), Cytosorbents Corp (NASDAQ:CTSO), Hingham Institution for Savings (NASDAQ:HIFS), Crescent Capital BDC, Inc. (NASDAQ:CCAP), and Casper Sleep Inc. (NYSE:CSPR). All of these stocks' market caps resemble MCFT's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PRTS,14,68315,9 NVGS,14,23631,1 LOOP,2,415,2 CTSO,9,17186,0 HIFS,1,4365,-2 CCAP,4,50980,-1 CSPR,2,6039,-2 Average,6.6,24419,1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.6 hedge funds with bullish positions and the average amount invested in these stocks was $24 million. That figure was $131 million in MCFT's case. CarParts.com, Inc. (NASDAQ:PRTS) is the most popular stock in this table. On the other hand Hingham Institution for Savings (NASDAQ:HIFS) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT) is more popular among hedge funds. Our overall hedge fund sentiment score for MCFT is 84.6. 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 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 gained 24.8% in 2020 through the end of September and still beat the market by 19.3 percentage points. Unfortunately MCFT wasn't nearly as popular as these 10 stocks and hedge funds that were betting on MCFT were disappointed as the stock returned -8.2% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.