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 821 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 March 31st, a week after the market trough. In this article we look at what those investors think of M/I Homes Inc (NYSE:MHO).
M/I Homes Inc (NYSE:MHO) was in 16 hedge funds' portfolios at the end of March. MHO shareholders have witnessed a decrease in activity from the world's largest hedge funds in recent months. There were 20 hedge funds in our database with MHO positions at the end of the previous quarter. Our calculations also showed that MHO 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.
According to most shareholders, hedge funds are seen as worthless, outdated investment tools of years past. While there are over 8000 funds in operation at present, We look at the crème de la crème of this club, about 850 funds. Most estimates calculate that this group of people shepherd the lion's share of all hedge funds' total asset base, and by watching their unrivaled stock picks, Insider Monkey has identified several investment strategies that have historically outpaced the market. Insider Monkey's flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points a 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 .
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Matthew Lindenbaum of Basswood Capital[/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. With all of this in mind we're going to take a glance at the new hedge fund action regarding M/I Homes Inc (NYSE:MHO).
What have hedge funds been doing with M/I Homes Inc (NYSE:MHO)?
At the end of the first quarter, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -20% from one quarter earlier. On the other hand, there were a total of 15 hedge funds with a bullish position in MHO a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
Among these funds, Basswood Capital held the most valuable stake in M/I Homes Inc (NYSE:MHO), which was worth $13.8 million at the end of the third quarter. On the second spot was Balyasny Asset Management which amassed $12.3 million worth of shares. Royce & Associates, Arrowstreet Capital, and Winton Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Gratia Capital allocated the biggest weight to M/I Homes Inc (NYSE:MHO), around 8.92% of its 13F portfolio. Basswood Capital is also relatively very bullish on the stock, designating 1.61 percent of its 13F equity portfolio to MHO.
Due to the fact that M/I Homes Inc (NYSE:MHO) has experienced falling interest from the aggregate hedge fund industry, we can see that there exists a select few funds that decided to sell off their positions entirely heading into Q4. Interestingly, Peter Algert and Kevin Coldiron's Algert Coldiron Investors sold off the biggest position of all the hedgies tracked by Insider Monkey, valued at about $2.2 million in stock, and Michael Gelband's ExodusPoint Capital was right behind this move, as the fund sold off about $1.1 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 4 funds heading into Q4.
Let's also examine hedge fund activity in other stocks similar to M/I Homes Inc (NYSE:MHO). These stocks are Himax Technologies, Inc. (NASDAQ:HIMX), Dime Community Bancshares, Inc. (NASDAQ:DCOM), Diamond S Shipping Inc. (NYSE:DSSI), and Brigham Minerals, Inc. (NYSE:MNRL). This group of stocks' market caps resemble MHO's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position HIMX,9,30979,5 DCOM,10,37714,0 DSSI,16,50899,-2 MNRL,19,54263,-4 Average,13.5,43464,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.5 hedge funds with bullish positions and the average amount invested in these stocks was $43 million. That figure was $46 million in MHO's case. Brigham Minerals, Inc. (NYSE:MNRL) is the most popular stock in this table. On the other hand Himax Technologies, Inc. (NASDAQ:HIMX) is the least popular one with only 9 bullish hedge fund positions. M/I Homes Inc (NYSE:MHO) is not the most popular stock in this group but hedge fund interest is still above average. 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 gained 13.3% in 2020 through June 25th but still beat the market by 16.8 percentage points. Hedge funds were also right about betting on MHO as the stock returned 92.5% in Q2 (through June 25th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.