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The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 866 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of March 31st. In this article we look at what those investors think of The Middleby Corporation (NASDAQ:MIDD).
Is MIDD a good stock to buy? Hedge funds were becoming less confident. The number of bullish hedge fund positions went down by 2 lately. The Middleby Corporation (NASDAQ:MIDD) was in 28 hedge funds' portfolios at the end of March. The all time high for this statistic is 35. Our calculations also showed that MIDD isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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. Hedge funds have more than $3.5 trillion in assets under management, so you can't expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds' moves today.
Louis Bacon Moore of Moore Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind let's take a look at the fresh hedge fund action regarding The Middleby Corporation (NASDAQ:MIDD).
Do Hedge Funds Think MIDD Is A Good Stock To Buy Now?
At the end of March, a total of 28 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -7% from the fourth quarter of 2020. By comparison, 26 hedge funds held shares or bullish call options in MIDD 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.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Citadel Investment Group, managed by Ken Griffin, holds the largest position in The Middleby Corporation (NASDAQ:MIDD). Citadel Investment Group has a $106 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $100.3 million position; 0.1% of its 13F portfolio is allocated to the stock. Other professional money managers that are bullish contain Renaissance Technologies, Brian Bares's Bares Capital Management and D. E. Shaw's D E Shaw. In terms of the portfolio weights assigned to each position Mountaineer Partners Management allocated the biggest weight to The Middleby Corporation (NASDAQ:MIDD), around 7.3% of its 13F portfolio. Jade Capital Advisors is also relatively very bullish on the stock, earmarking 3.63 percent of its 13F equity portfolio to MIDD.
Since The Middleby Corporation (NASDAQ:MIDD) has faced declining sentiment from hedge fund managers, we can see that there exists a select few hedgies who were dropping their entire stakes in the first quarter. Intriguingly, Matthew Hulsizer's PEAK6 Capital Management said goodbye to the biggest investment of the 750 funds tracked by Insider Monkey, worth an estimated $3.7 million in stock, and Ray Dalio's Bridgewater Associates was right behind this move, as the fund sold off about $2.6 million worth. These moves are interesting, as aggregate hedge fund interest fell by 2 funds in the first quarter.
Let's go over hedge fund activity in other stocks similar to The Middleby Corporation (NASDAQ:MIDD). These stocks are Amdocs Limited (NYSE:DOX), CRISPR Therapeutics AG (NASDAQ:CRSP), Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI), BridgeBio Pharma, Inc. (NASDAQ:BBIO), Pinnacle West Capital Corporation (NYSE:PNW), AngloGold Ashanti Limited (NYSE:AU), and AbCellera Biologics Inc. (NASDAQ:ABCL). This group of stocks' market caps are closest to MIDD's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position DOX,32,716631,12 CRSP,27,1407504,-7 MRVI,26,401044,-8 BBIO,26,2899063,3 PNW,15,145574,-9 AU,14,319512,-3 ABCL,20,1842948,-5 Average,22.9,1104611,-2.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.9 hedge funds with bullish positions and the average amount invested in these stocks was $1105 million. That figure was $521 million in MIDD's case. Amdocs Limited (NYSE:DOX) is the most popular stock in this table. On the other hand AngloGold Ashanti Limited (NYSE:AU) is the least popular one with only 14 bullish hedge fund positions. The Middleby Corporation (NASDAQ:MIDD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MIDD is 65.9. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through July 9th and beat the market again by 6.7 percentage points. Unfortunately MIDD wasn't nearly as popular as these 5 stocks and hedge funds that were betting on MIDD were disappointed as the stock returned 5.5% since the end of March (through 7/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.