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In this article we will analyze whether Maxar Technologies Inc (NYSE:MAXR) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There's no better way to get these firms' immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
Is MAXR a good stock to buy now? The smart money was betting on the stock. The number of long hedge fund positions increased by 2 in recent months. Maxar Technologies Inc (NYSE:MAXR) was in 17 hedge funds' portfolios at the end of September. The all time high for this statistic is 20. Our calculations also showed that MAXR isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 15 hedge funds in our database with MAXR holdings at the end of June.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most shareholders, hedge funds are assumed to be unimportant, outdated investment vehicles of the past. While there are over 8000 funds in operation at present, We choose to focus on the upper echelon of this group, approximately 850 funds. Most estimates calculate that this group of people have their hands on the majority of the hedge fund industry's total asset base, and by shadowing their best stock picks, Insider Monkey has brought to light various investment strategies that have historically outrun the broader indices. Insider Monkey's flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
Paul Marshall of Marshall Wace
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now let's review the fresh hedge fund action encompassing Maxar Technologies Inc (NYSE:MAXR).
Do Hedge Funds Think MAXR Is A Good Stock To Buy Now?
At Q3's end, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 13% from the previous quarter. On the other hand, there were a total of 20 hedge funds with a bullish position in MAXR a year ago. With hedge funds' capital changing hands, there exists a select group of notable hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
The largest stake in Maxar Technologies Inc (NYSE:MAXR) was held by Corriente Advisors, which reported holding $49.2 million worth of stock at the end of September. It was followed by D E Shaw with a $45.4 million position. Other investors bullish on the company included Simcoe Capital Management, Renaissance Technologies, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position Corriente Advisors allocated the biggest weight to Maxar Technologies Inc (NYSE:MAXR), around 24.94% of its 13F portfolio. Simcoe Capital Management is also relatively very bullish on the stock, setting aside 6.91 percent of its 13F equity portfolio to MAXR.
As one would reasonably expect, key hedge funds were leading the bulls' herd. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the most outsized position in Maxar Technologies Inc (NYSE:MAXR). Arrowstreet Capital had $5.5 million invested in the company at the end of the quarter. Dmitry Balyasny's Balyasny Asset Management also initiated a $1.5 million position during the quarter. The following funds were also among the new MAXR investors: Matthew Hulsizer's PEAK6 Capital Management, Karim Abbadi and Edward McBride's Centiva Capital, and Paul Marshall and Ian Wace's Marshall Wace LLP.
Let's now take a look at hedge fund activity in other stocks similar to Maxar Technologies Inc (NYSE:MAXR). We will take a look at Skyline Champion Corporation (NYSE:SKY), Edgewell Personal Care Company (NYSE:EPC), Meritor Inc (NYSE:MTOR), Heartland Express, Inc. (NASDAQ:HTLD), Fulton Financial Corp (NASDAQ:FULT), NMI Holdings Inc (NASDAQ:NMIH), and Simulations Plus, Inc. (NASDAQ:SLP). This group of stocks' market caps are similar to MAXR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SKY,23,205908,0 EPC,21,188145,1 MTOR,17,192344,-1 HTLD,15,57175,2 FULT,15,36348,0 NMIH,19,195944,-11 SLP,10,41800,1 Average,17.1,131095,-1.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.1 hedge funds with bullish positions and the average amount invested in these stocks was $131 million. That figure was $150 million in MAXR's case. Skyline Champion Corporation (NYSE:SKY) is the most popular stock in this table. On the other hand Simulations Plus, Inc. (NASDAQ:SLP) is the least popular one with only 10 bullish hedge fund positions. Maxar Technologies Inc (NYSE:MAXR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MAXR is 59.4. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on MAXR as the stock returned 36.5% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.