Concerns over rising interest rates and expected further rate increases have hit several stocks hard during the fourth quarter. Trends reversed 180 degrees during the first quarter amid Powell's pivot and optimistic expectations towards a trade deal with China. Hedge funds and institutional investors tracked by Insider Monkey usually invest a disproportionate amount of their portfolios in smaller cap stocks. We have been receiving indications that hedge funds were increasing their overall exposure in the first quarter and this is one of the factors behind the recent movements in major indices. In this article, we will take a closer look at hedge fund sentiment towards The Manitowoc Company, Inc. (NYSE:MTW).
The Manitowoc Company, Inc. (NYSE:MTW) has seen an increase in support from the world's most elite money managers in recent months. Our calculations also showed that MTW isn't among the 30 most popular stocks among hedge funds.
To most shareholders, hedge funds are seen as slow, outdated investment vehicles of yesteryear. While there are more than 8000 funds in operation at the moment, Our researchers look at the moguls of this group, about 750 funds. These investment experts preside over most of all hedge funds' total capital, and by following their highest performing stock picks, Insider Monkey has revealed several investment strategies that have historically surpassed the broader indices. Insider Monkey's flagship hedge fund strategy beat the S&P 500 index by around 5 percentage points annually since its inception in May 2014 through the end of May. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 30.9% since February 2017 (through May 30th) even though the market was up nearly 24% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 11.9% in less than a couple of weeks whereas our long picks outperformed the market by 2 percentage points in this volatile 2 week period.
Let's review the recent hedge fund action regarding The Manitowoc Company, Inc. (NYSE:MTW).
Hedge fund activity in The Manitowoc Company, Inc. (NYSE:MTW)
Heading into the second quarter of 2019, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 43% from one quarter earlier. By comparison, 21 hedge funds held shares or bullish call options in MTW a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
The largest stake in The Manitowoc Company, Inc. (NYSE:MTW) was held by Firefly Value Partners, which reported holding $55.3 million worth of stock at the end of March. It was followed by Hawk Ridge Management with a $13 million position. Other investors bullish on the company included Rutabaga Capital Management, Marshall Wace LLP, and Lodge Hill Capital.
Now, some big names have jumped into The Manitowoc Company, Inc. (NYSE:MTW) headfirst. Lodge Hill Capital, managed by Clint Murray, assembled the largest position in The Manitowoc Company, Inc. (NYSE:MTW). Lodge Hill Capital had $5.3 million invested in the company at the end of the quarter. Jim Simons's Renaissance Technologies also initiated a $4.7 million position during the quarter. The following funds were also among the new MTW investors: Steve Cohen's Point72 Asset Management, Clint Murray's Lodge Hill Capital, and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital.
Let's now review hedge fund activity in other stocks similar to The Manitowoc Company, Inc. (NYSE:MTW). These stocks are Midland States Bancorp, Inc. (NASDAQ:MSBI), BlackRock MuniVest Fund, Inc. (NYSE:MVF), Sorrento Therapeutics Inc (NASDAQ:SRNE), and Bridge Bancorp, Inc. (NASDAQ:BDGE). This group of stocks' market caps resemble MTW's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MSBI,4,1643,-3 MVF,1,450,-2 SRNE,5,3048,-1 BDGE,11,97507,2 Average,5.25,25662,-1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.25 hedge funds with bullish positions and the average amount invested in these stocks was $26 million. That figure was $114 million in MTW's case. Bridge Bancorp, Inc. (NASDAQ:BDGE) is the most popular stock in this table. On the other hand BlackRock MuniVest Fund, Inc. (NYSE:MVF) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks The Manitowoc Company, Inc. (NYSE:MTW) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately MTW wasn't nearly as popular as these 20 stocks and hedge funds that were betting on MTW were disappointed as the stock returned -14% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published at Insider Monkey.