"The global economic environment is very favorable for investors. Economies are generally strong, but not too strong. Employment levels are among the strongest for many decades. Interest rates are paused at very low levels, and the risk of significant increases in the medium term seems low. Financing for transactions is freely available to good borrowers, but not in major excess. Covenants are lighter than they were five years ago, but the extreme excesses seen in the past do not seem prevalent yet today. Despite this apparent ‘goldilocks’ market environment, we continue to worry about a world where politics are polarized almost everywhere, interest rates are low globally, and equity valuations are at their peak," are the words of Brookfield Asset Management. Brookfield was right about politics as stocks experienced their second worst May since the 1960s due to escalation of trade disputes. We pay attention to what hedge funds are doing in a particular stock before considering a potential investment because it works for us. So let’s take a glance at the smart money sentiment towards Mantech International Corp (NASDAQ:MANT) and see how it was affected.
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' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We're going to go over the recent hedge fund action regarding Mantech International Corp (NASDAQ:MANT).
How are hedge funds trading Mantech International Corp (NASDAQ:MANT)?
At the end of the first quarter, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from the fourth quarter of 2018. On the other hand, there were a total of 19 hedge funds with a bullish position in MANT a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Millennium Management held the most valuable stake in Mantech International Corp (NASDAQ:MANT), which was worth $5.9 million at the end of the first quarter. On the second spot was Citadel Investment Group which amassed $3.6 million worth of shares. Moreover, Marshall Wace LLP, Horizon Asset Management, and D E Shaw were also bullish on Mantech International Corp (NASDAQ:MANT), allocating a large percentage of their portfolios to this stock.
As aggregate interest increased, key hedge funds have jumped into Mantech International Corp (NASDAQ:MANT) headfirst. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, established the most valuable position in Mantech International Corp (NASDAQ:MANT). Marshall Wace LLP had $1.5 million invested in the company at the end of the quarter. D. E. Shaw's D E Shaw also initiated a $0.9 million position during the quarter. The other funds with brand new MANT positions are Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, Hoon Kim's Quantinno Capital, and Andrew Feldstein and Stephen Siderow's Blue Mountain Capital.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Mantech International Corp (NASDAQ:MANT) but similarly valued. We will take a look at Lithia Motors Inc (NYSE:LAD), GCP Applied Technologies Inc. (NYSE:GCP), Golar LNG Limited (NASDAQ:GLNG), and CNX Resources Corporation (NYSE:CNX). This group of stocks' market values are similar to MANT's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LAD,17,536544,-3 GCP,26,539333,10 GLNG,28,423133,-4 CNX,21,706206,-2 Average,23,551304,0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $551 million. That figure was $17 million in MANT's case. Golar LNG Limited (NASDAQ:GLNG) is the most popular stock in this table. On the other hand Lithia Motors Inc (NYSE:LAD) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks Mantech International Corp (NASDAQ:MANT) is even less popular than LAD. Hedge funds clearly dropped the ball on MANT as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on MANT as the stock returned 19.6% during the same period and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.