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Hedge Funds Are Piling Into Medical Properties Trust, Inc. (MPW)

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Is Medical Properties Trust, Inc. (NYSE:MPW) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.

Is Medical Properties Trust, Inc. (NYSE:MPW) a buy right now? Hedge funds were buying. The number of long hedge fund positions improved by 7 lately. Medical Properties Trust, Inc. (NYSE:MPW) was in 23 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 23. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that MPW isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 16 hedge funds in our database with MPW holdings at the end of December.

According to most stock holders, hedge funds are viewed as unimportant, old financial vehicles of years past. While there are over 8000 funds with their doors open at the moment, We hone in on the top tier of this group, approximately 850 funds. These investment experts direct the majority of the hedge fund industry's total asset base, and by keeping track of their matchless picks, Insider Monkey has revealed several investment strategies that have historically outrun the broader indices. Insider Monkey's flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Matthew Halbower Pentwater Capital
Matthew Halbower Pentwater Capital

Matthew Halbower of Pentwater Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery 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. With all of this in mind let's take a gander at the new hedge fund action encompassing Medical Properties Trust, Inc. (NYSE:MPW).

Do Hedge Funds Think MPW Is A Good Stock To Buy Now?

At Q1's end, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of 44% from the previous quarter. The graph below displays the number of hedge funds with bullish position in MPW over the last 23 quarters. With hedgies' capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).

According to Insider Monkey's hedge fund database, Amy Minella's Cardinal Capital has the largest position in Medical Properties Trust, Inc. (NYSE:MPW), worth close to $127.8 million, corresponding to 3.1% of its total 13F portfolio. Sitting at the No. 2 spot is Millennium Management, led by Israel Englander, holding a $54.4 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that hold long positions encompass Eduardo Abush's Waterfront Capital Partners, Dmitry Balyasny's Balyasny Asset Management and Clint Carlson's Carlson Capital. In terms of the portfolio weights assigned to each position Waterfront Capital Partners allocated the biggest weight to Medical Properties Trust, Inc. (NYSE:MPW), around 3.96% of its 13F portfolio. Cardinal Capital is also relatively very bullish on the stock, earmarking 3.13 percent of its 13F equity portfolio to MPW.

With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Full18 Capital, managed by Allon Hellmann, created the most valuable position in Medical Properties Trust, Inc. (NYSE:MPW). Full18 Capital had $3.6 million invested in the company at the end of the quarter. Michael Gelband's ExodusPoint Capital also made a $2.2 million investment in the stock during the quarter. The other funds with brand new MPW positions are Matthew Halbower's Pentwater Capital Management, Andrew Weiss's Weiss Asset Management, and Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors.

Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Medical Properties Trust, Inc. (NYSE:MPW) but similarly valued. These stocks are Texas Pacific Land Corporation (NYSE:TPL), Sunrun Inc (NASDAQ:RUN), Canopy Growth Corporation (NASDAQ:CGC), Opendoor Technologies Inc. (NASDAQ:OPEN), Quanta Services Inc (NYSE:PWR), RH (NYSE:RH), and Cna Financial Corporation (NYSE:CNA). This group of stocks' market valuations resemble MPW's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TPL,17,2556654,6 RUN,41,2405187,-7 CGC,12,157087,-7 OPEN,33,1046505,5 PWR,33,897017,0 RH,50,2992390,8 CNA,19,74356,3 Average,29.3,1447028,1.1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 29.3 hedge funds with bullish positions and the average amount invested in these stocks was $1447 million. That figure was $271 million in MPW's case. RH (NYSE:RH) is the most popular stock in this table. On the other hand Canopy Growth Corporation (NASDAQ:CGC) is the least popular one with only 12 bullish hedge fund positions. Medical Properties Trust, Inc. (NYSE:MPW) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MPW is 54.5. 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. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. 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 gained 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately MPW wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); MPW investors were disappointed as the stock returned -1.8% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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Disclosure: None. This article was originally published at Insider Monkey.