Hedge funds are not perfect. They have their bad picks just like everyone else. Facebook, a stock hedge funds have loved dearly, lost nearly 40% of its value at one point in 2018. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 20 S&P 500 stocks among hedge funds beat the S&P 500 Index by nearly 10 percentage points so far in 2019. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of MidWestOne Financial Group, Inc. (NASDAQ:MOFG).
MidWestOne Financial Group, Inc. (NASDAQ:MOFG) investors should be aware of an increase in hedge fund interest recently. MOFG was in 9 hedge funds' portfolios at the end of the third quarter of 2019. There were 5 hedge funds in our database with MOFG positions at the end of the previous quarter. Our calculations also showed that MOFG isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are several methods investors use to size up stocks. A couple of the most under-the-radar methods are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the best picks of the elite money managers can trounce the market by a very impressive margin (see the details here).
[caption id="attachment_26073" align="alignnone" width="600"] Jim Simons of Renaissance Technologies[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds' buy/sell signals. Let's review the new hedge fund action encompassing MidWestOne Financial Group, Inc. (NASDAQ:MOFG).
What does smart money think about MidWestOne Financial Group, Inc. (NASDAQ:MOFG)?
Heading into the fourth quarter of 2019, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 80% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in MOFG over the last 17 quarters. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Renaissance Technologies, holds the largest position in MidWestOne Financial Group, Inc. (NASDAQ:MOFG). Renaissance Technologies has a $6.5 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Chuck Royce of Royce & Associates, with a $1.7 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other professional money managers that hold long positions comprise David Harding's Winton Capital Management, Israel Englander's Millennium Management and Emanuel J. Friedman's EJF Capital. In terms of the portfolio weights assigned to each position Zebra Capital Management allocated the biggest weight to MidWestOne Financial Group, Inc. (NASDAQ:MOFG), around 0.23% of its 13F portfolio. EJF Capital is also relatively very bullish on the stock, designating 0.08 percent of its 13F equity portfolio to MOFG.
As aggregate interest increased, key money managers have jumped into MidWestOne Financial Group, Inc. (NASDAQ:MOFG) headfirst. Winton Capital Management, managed by David Harding, established the most outsized position in MidWestOne Financial Group, Inc. (NASDAQ:MOFG). Winton Capital Management had $1.1 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also made a $0.8 million investment in the stock during the quarter. The following funds were also among the new MOFG investors: Ken Griffin's Citadel Investment Group and Roger Ibbotson's Zebra Capital Management.
Let's check out hedge fund activity in other stocks similar to MidWestOne Financial Group, Inc. (NASDAQ:MOFG). These stocks are Fortuna Silver Mines Inc. (NYSE:FSM), America First Multifamily Investors, L.P. (NASDAQ:ATAX), Falcon Minerals Corporation (NASDAQ:FLMN), and Azure Power Global Limited (NYSE:AZRE). This group of stocks' market valuations match MOFG's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FSM,12,55835,0 ATAX,4,3901,1 FLMN,19,72785,-3 AZRE,4,7526,-2 Average,9.75,35012,-1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.75 hedge funds with bullish positions and the average amount invested in these stocks was $35 million. That figure was $12 million in MOFG's case. Falcon Minerals Corporation (NASDAQ:FLMN) is the most popular stock in this table. On the other hand America First Multifamily Investors, L.P. (NASDAQ:ATAX) is the least popular one with only 4 bullish hedge fund positions. MidWestOne Financial Group, Inc. (NASDAQ:MOFG) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on MOFG as the stock returned 12.1% during the first two months of Q4 and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.