At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Marine Products Corp. (NYSE:MPX).
Marine Products Corp. (NYSE:MPX) shareholders have witnessed an increase in enthusiasm from smart money in recent months. Our calculations also showed that MPX 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.
To the average investor there are a lot of formulas stock market investors put to use to grade their holdings. Two of the most useful formulas are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the top picks of the best fund managers can beat their index-focused peers by a significant amount (see the details here).
[caption id="attachment_375529" align="aligncenter" width="400"] Mario Gabelli of GAMCO Investors[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we're going to take a gander at the latest hedge fund action encompassing Marine Products Corp. (NYSE:MPX).
How are hedge funds trading Marine Products Corp. (NYSE:MPX)?
At the end of the first quarter, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from the fourth quarter of 2019. By comparison, 6 hedge funds held shares or bullish call options in MPX a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, GAMCO Investors was the largest shareholder of Marine Products Corp. (NYSE:MPX), with a stake worth $6.3 million reported as of the end of September. Trailing GAMCO Investors was Renaissance Technologies, which amassed a stake valued at $2 million. Arrowstreet Capital, Zebra Capital Management, and Citadel Investment Group 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 Zebra Capital Management allocated the biggest weight to Marine Products Corp. (NYSE:MPX), around 0.21% of its 13F portfolio. GAMCO Investors is also relatively very bullish on the stock, earmarking 0.07 percent of its 13F equity portfolio to MPX.
As one would reasonably expect, key money managers were breaking ground themselves. Citadel Investment Group, managed by Ken Griffin, initiated the most outsized position in Marine Products Corp. (NYSE:MPX). Citadel Investment Group had $0.1 million invested in the company at the end of the quarter. David Harding's Winton Capital Management also made a $0.1 million investment in the stock during the quarter.
Let's check out hedge fund activity in other stocks similar to Marine Products Corp. (NYSE:MPX). These stocks are FLEX LNG Ltd. (NYSE:FLNG), Kimball Electronics Inc (NASDAQ:KE), Digi International Inc. (NASDAQ:DGII), and ProQR Therapeutics NV (NASDAQ:PRQR). This group of stocks' market valuations are similar to MPX's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FLNG,1,11,0 KE,9,13971,-4 DGII,11,29958,-4 PRQR,8,49997,-3 Average,7.25,23484,-2.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.25 hedge funds with bullish positions and the average amount invested in these stocks was $23 million. That figure was $9 million in MPX's case. Digi International Inc. (NASDAQ:DGII) is the most popular stock in this table. On the other hand FLEX LNG Ltd. (NYSE:FLNG) is the least popular one with only 1 bullish hedge fund positions. Marine Products Corp. (NYSE:MPX) is not the least popular stock in this group but hedge fund interest is still below 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 13.9% in 2020 through June 10th and still beat the market by 14.2 percentage points. A small number of hedge funds were also right about betting on MPX as the stock returned 74.2% during the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.