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With the second-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the third quarter of 2021. One of these stocks was Macquarie Infrastructure Corporation (NYSE:MIC).
Is Macquarie Infrastructure Corporation (NYSE:MIC) the right pick for your portfolio? Hedge funds were turning bullish. The number of long hedge fund bets inched up by 1 recently. Macquarie Infrastructure Corporation (NYSE:MIC) was in 34 hedge funds' portfolios at the end of June. The all time high for this statistic is 69. Our calculations also showed that MIC isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Nathaniel August of Mangrove Partners
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, we like undervalued, EBITDA-positive growth stocks, so we are checking out stock pitches like this emerging biotech stock. We go through lists like the 10 best EV stocks 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. Keeping this in mind we're going to take a glance at the recent hedge fund action regarding Macquarie Infrastructure Corporation (NYSE:MIC).
Do Hedge Funds Think MIC Is A Good Stock To Buy Now?
At second quarter's end, a total of 34 of the hedge funds tracked by Insider Monkey were long this stock, a change of 3% from one quarter earlier. By comparison, 38 hedge funds held shares or bullish call options in MIC a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Michael Cowley's Sandbar Asset Management has the largest position in Macquarie Infrastructure Corporation (NYSE:MIC), worth close to $67.3 million, amounting to 7.3% of its total 13F portfolio. Sitting at the No. 2 spot is Mario Gabelli of GAMCO Investors, with a $52.9 million position; 0.4% of its 13F portfolio is allocated to the company. Some other professional money managers with similar optimism consist of Matthew Mark's Jet Capital Investors, Nathaniel August's Mangrove Partners and Marc Majzner's Clearline Capital. In terms of the portfolio weights assigned to each position Litespeed Management allocated the biggest weight to Macquarie Infrastructure Corporation (NYSE:MIC), around 11.61% of its 13F portfolio. Jet Capital Investors is also relatively very bullish on the stock, designating 9.07 percent of its 13F equity portfolio to MIC.
As aggregate interest increased, key hedge funds were breaking ground themselves. Segantii Capital, managed by Simon Sadler, initiated the biggest position in Macquarie Infrastructure Corporation (NYSE:MIC). Segantii Capital had $21.5 million invested in the company at the end of the quarter. Curtis Schenker and Craig Effron's Scoggin also initiated a $12.4 million position during the quarter. The following funds were also among the new MIC investors: D. E. Shaw's D E Shaw, Matthew Mark's Jet Capital Investors, and Michael Gelband's ExodusPoint Capital.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Macquarie Infrastructure Corporation (NYSE:MIC) but similarly valued. We will take a look at John Wiley & Sons Inc (NYSE:JW), Federated Hermes, Inc. (NYSE:FHI), HB Fuller Co (NYSE:FUL), Atkore International Group Inc. (NYSE:ATKR), Medifast, Inc. (NYSE:MED), Dorman Products Inc. (NASDAQ:DORM), and Terex Corporation (NYSE:TEX). All of these stocks' market caps are similar to MIC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position JW,16,171399,0 FHI,25,223777,-2 FUL,12,160982,-4 ATKR,25,180345,4 MED,23,376934,1 DORM,18,67951,-3 TEX,27,470987,-4 Average,20.9,236054,-1.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.9 hedge funds with bullish positions and the average amount invested in these stocks was $236 million. That figure was $436 million in MIC's case. Terex Corporation (NYSE:TEX) is the most popular stock in this table. On the other hand HB Fuller Co (NYSE:FUL) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Macquarie Infrastructure Corporation (NYSE:MIC) is more popular among hedge funds. Our overall hedge fund sentiment score for MIC is 70.8. 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 returned 21.8% in 2021 through October 11th but still managed to beat the market by 4.4 percentage points. Hedge funds were also right about betting on MIC as the stock returned 20.7% since the end of June (through 10/11) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.