Hedge Funds Never Been More Bullish On WillScot Mobile Mini Holdings Corp. (WSC)
The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at 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. Stocks kept going up since then. In this article we look at how hedge funds traded WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) and determine whether the smart money was really smart about this stock.
WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) has experienced an increase in enthusiasm from smart money recently. WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) was in 31 hedge funds' portfolios at the end of the second quarter of 2020. The all time high for this statistics is 31. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 28 hedge funds in our database with WSC positions at the end of the first quarter. Our calculations also showed that WSC 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).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. 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 58 percentage points since March 2017 (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.
Paul Marshall of Marshall Wace
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, this “mom” trader turned $2000 into $2 million within 2 years. So, we are checking out her best trade idea of the month. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. 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. With all of this in mind we're going to view the recent hedge fund action regarding WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC).
How have hedgies been trading WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC)?
At the end of the second quarter, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 11% from one quarter earlier. On the other hand, there were a total of 23 hedge funds with a bullish position in WSC a year ago. With hedge funds' sentiment swirling, there exists an "upper tier" of notable hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
The largest stake in WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) was held by Broad Bay Capital, which reported holding $40.9 million worth of stock at the end of September. It was followed by Rubric Capital Management with a $38.4 million position. Other investors bullish on the company included Bayberry Capital Partners, Dendur Capital, and Chescapmanager LLC. In terms of the portfolio weights assigned to each position Dendur Capital allocated the biggest weight to WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC), around 10.01% of its 13F portfolio. Broad Bay Capital is also relatively very bullish on the stock, earmarking 7.3 percent of its 13F equity portfolio to WSC.
With a general bullishness amongst the heavyweights, key money managers were leading the bulls' herd. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, established the biggest position in WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC). Marshall Wace LLP had $8.6 million invested in the company at the end of the quarter. Richard Driehaus's Driehaus Capital also initiated a $7.2 million position during the quarter. The other funds with new positions in the stock are Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, Anand Parekh's Alyeska Investment Group, and Michael Gelband's ExodusPoint Capital.
Let's check out hedge fund activity in other stocks similar to WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC). We will take a look at WSFS Financial Corporation (NASDAQ:WSFS), Belden Inc. (NYSE:BDC), Resideo Technologies, Inc. (NYSE:REZI), Beam Therapeutics Inc. (NASDAQ:BEAM), So-Young International Inc. (NASDAQ:SY), Rush Enterprises, Inc. (NASDAQ:RUSHB), and Addus Homecare Corporation (NASDAQ:ADUS). This group of stocks' market caps are similar to WSC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position WSFS,17,118488,5 BDC,19,89326,5 REZI,20,367520,-5 BEAM,10,238351,-1 SY,7,16753,1 RUSHB,4,30427,1 ADUS,19,67991,4 Average,13.7,132694,1.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.7 hedge funds with bullish positions and the average amount invested in these stocks was $133 million. That figure was $283 million in WSC's case. Resideo Technologies, Inc. (NYSE:REZI) is the most popular stock in this table. On the other hand Rush Enterprises, Inc. (NASDAQ:RUSHB) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) is more popular among hedge funds. Our overall hedge fund sentiment score for WSC is 88. 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 returned 23.8% in 2020 through September 14th but still managed to beat the market by 17.6 percentage points. Hedge funds were also right about betting on WSC as the stock returned 39.1% since the end of June 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.
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