The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on September 30th. We at Insider Monkey have made an extensive database of nearly 750 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Maui Land & Pineapple Company, Inc. (NYSE:MLP) based on those filings.
Hedge fund interest in Maui Land & Pineapple Company, Inc. (NYSE:MLP) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare MLP to other stocks including Geospace Technologies Corp (NASDAQ:GEOS), Eros International plc (NYSE:EROS), and Atento SA (NYSE:ATTO) to get a better sense of its popularity. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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 Russell 2000 ETFs by 40 percentage points since May 2014 (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 27.8% through November 21, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We're going to take a look at the recent hedge fund action encompassing Maui Land & Pineapple Company, Inc. (NYSE:MLP).
What does smart money think about Maui Land & Pineapple Company, Inc. (NYSE:MLP)?
Heading into the fourth quarter of 2019, a total of 2 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards MLP over the last 17 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Valueworks LLC was the largest shareholder of Maui Land & Pineapple Company, Inc. (NYSE:MLP), with a stake worth $5.1 million reported as of the end of September. Trailing Valueworks LLC was Renaissance Technologies, which amassed a stake valued at $1.6 million.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren't any hedge funds dumping their holdings during the third quarter, there weren't any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven't identified any viable catalysts that can attract investor attention.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Maui Land & Pineapple Company, Inc. (NYSE:MLP) but similarly valued. These stocks are Geospace Technologies Corp (NASDAQ:GEOS), Eros International plc (NYSE:EROS), Atento SA (NYSE:ATTO), and Fluent, Inc. (NASDAQ:FLNT). This group of stocks' market valuations are closest to MLP's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GEOS,6,10404,0 EROS,6,12518,-2 ATTO,7,1952,-2 FLNT,8,5064,-1 Average,6.75,7485,-1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.75 hedge funds with bullish positions and the average amount invested in these stocks was $7 million. That figure was $7 million in MLP's case. Fluent, Inc. (NASDAQ:FLNT) is the most popular stock in this table. On the other hand Geospace Technologies Corp (NASDAQ:GEOS) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Maui Land & Pineapple Company, Inc. (NYSE:MLP) is even less popular than GEOS. Hedge funds dodged a bullet by taking a bearish stance towards MLP. Our calculations showed that the top 20 most popular hedge fund stocks returned 34.7% in 2019 through November 22nd and outperformed the S&P 500 ETF (SPY) by 8.5 percentage points. Unfortunately MLP wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); MLP investors were disappointed as the stock returned -1.9% during the fourth quarter (through 11/22) 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 70 percent of these stocks already outperformed the market so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.