Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Modine Manufacturing Company (NYSE:MOD).
Modine Manufacturing Company (NYSE:MOD) was in 16 hedge funds' portfolios at the end of March. MOD shareholders have witnessed a decrease in hedge fund interest of late. There were 17 hedge funds in our database with MOD holdings at the end of the previous quarter. Our calculations also showed that MOD isn't among the 30 most popular stocks among hedge funds (click for Q1 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.
If you'd ask most investors, hedge funds are perceived as slow, old investment tools of the past. While there are over 8000 funds with their doors open at present, Our experts look at the masters of this group, approximately 850 funds. It is estimated that this group of investors direct bulk of the smart money's total capital, and by paying attention to their inimitable picks, Insider Monkey has unearthed numerous investment strategies that have historically beaten Mr. Market. 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. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
[caption id="attachment_258232" align="aligncenter" width="395"] Mario Gabelli of GAMCO Investors[/caption]
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, blockchain technology's influence will go beyond online payments. So, we are checking out this futurist's moonshot opportunities in tech stocks. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we're going to analyze the new hedge fund action surrounding Modine Manufacturing Company (NYSE:MOD).
What have hedge funds been doing with Modine Manufacturing Company (NYSE:MOD)?
At Q1's end, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -6% from the fourth quarter of 2019. On the other hand, there were a total of 17 hedge funds with a bullish position in MOD a year ago. With hedgies' capital changing hands, there exists an "upper tier" of key hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Mario Gabelli's GAMCO Investors has the largest position in Modine Manufacturing Company (NYSE:MOD), worth close to $4.7 million, corresponding to 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Royce & Associates, managed by Chuck Royce, which holds a $3.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include Douglas Dethy's DC Capital Partners, D. E. Shaw's D E Shaw and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital. In terms of the portfolio weights assigned to each position DC Capital Partners allocated the biggest weight to Modine Manufacturing Company (NYSE:MOD), around 21.66% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, dishing out 0.27 percent of its 13F equity portfolio to MOD.
Seeing as Modine Manufacturing Company (NYSE:MOD) has faced declining sentiment from the smart money, it's easy to see that there were a few hedge funds who were dropping their full holdings heading into Q4. Intriguingly, Paul Marshall and Ian Wace's Marshall Wace LLP said goodbye to the largest investment of the 750 funds followed by Insider Monkey, comprising close to $0.9 million in stock, and Donald Sussman's Paloma Partners was right behind this move, as the fund cut about $0.3 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 1 funds heading into Q4.
Let's now review hedge fund activity in other stocks similar to Modine Manufacturing Company (NYSE:MOD). These stocks are Saga Communications, Inc. (NASDAQ:SGA), Plymouth Industrial REIT, Inc. (NYSE:PLYM), CECO Environmental Corp. (NASDAQ:CECE), and Griffin Industrial Realty, Inc. (NASDAQ:GRIF). This group of stocks' market values match MOD's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SGA,3,15949,0 PLYM,9,15292,0 CECE,7,29575,-2 GRIF,4,25050,1 Average,5.75,21467,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.75 hedge funds with bullish positions and the average amount invested in these stocks was $21 million. That figure was $20 million in MOD's case. Plymouth Industrial REIT, Inc. (NYSE:PLYM) is the most popular stock in this table. On the other hand Saga Communications, Inc. (NASDAQ:SGA) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Modine Manufacturing Company (NYSE:MOD) is more popular among hedge funds. 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 13.3% in 2020 through June 25th but still managed to beat the market by 16.8 percentage points. Hedge funds were also right about betting on MOD as the stock returned 51.7% so far in Q2 (through June 25th) 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.
Disclosure: None. This article was originally published at Insider Monkey.