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In this article we will analyze whether MYR Group Inc (NASDAQ:MYRG) 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 MYRG a good stock to buy now? MYR Group Inc (NASDAQ:MYRG) shareholders have witnessed an increase in activity from the world's largest hedge funds lately. MYR Group Inc (NASDAQ:MYRG) was in 10 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistics is 17. There were 8 hedge funds in our database with MYRG holdings at the end of June. Our calculations also showed that MYRG 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).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Roger Ibbotson of Zebra Capital Management
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. Keeping this in mind let's review the fresh hedge fund action encompassing MYR Group Inc (NASDAQ:MYRG).
Do Hedge Funds Think MYRG Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards MYRG over the last 21 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
The largest stake in MYR Group Inc (NASDAQ:MYRG) was held by Third Avenue Management, which reported holding $11.3 million worth of stock at the end of September. It was followed by Royce & Associates with a $9.4 million position. Other investors bullish on the company included AQR Capital Management, Arrowstreet Capital, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Third Avenue Management allocated the biggest weight to MYR Group Inc (NASDAQ:MYRG), around 1.57% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, earmarking 0.52 percent of its 13F equity portfolio to MYRG.
Consequently, specific money managers were leading the bulls' herd. Tudor Investment Corp, managed by Paul Tudor Jones, assembled the largest position in MYR Group Inc (NASDAQ:MYRG). Tudor Investment Corp had $0.4 million invested in the company at the end of the quarter. Roger Ibbotson's Zebra Capital Management also initiated a $0.3 million position during the quarter.
Let's check out hedge fund activity in other stocks similar to MYR Group Inc (NASDAQ:MYRG). We will take a look at Omeros Corporation (NASDAQ:OMER), Forrester Research, Inc. (NASDAQ:FORR), Five Point Holdings, LLC (NYSE:FPH), Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD), Tilray, Inc. (NASDAQ:TLRY), Saul Centers Inc (NYSE:BFS), and ARMOUR Residential REIT, Inc. (NYSE:ARR). This group of stocks' market values are closest to MYRG's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position OMER,15,96335,8 FORR,8,73281,1 FPH,13,143746,-1 GLDD,20,96450,3 TLRY,6,18056,-5 BFS,7,23157,0 ARR,11,21680,0 Average,11.4,67529,0.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.4 hedge funds with bullish positions and the average amount invested in these stocks was $68 million. That figure was $34 million in MYRG's case. Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) is the most popular stock in this table. On the other hand Tilray, Inc. (NASDAQ:TLRY) is the least popular one with only 6 bullish hedge fund positions. MYR Group Inc (NASDAQ:MYRG) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MYRG is 38.9. 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. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on MYRG as the stock returned 55.1% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.