As the market is driven by near-term sentiment influenced by the accommodating US interest rate environment, virus news and stimulus spending, many smart investors are starting to be cautious about the current uptrend since March 2020 and hedging or reducing many of their long positions. Some fund managers bet on the Dow Jones reaching 40,000 to generate solid returns. However, as we know, big investors usually buy stocks with strong fundamentals that can generate gains in both bullish and bearish markets, which is why we believe we can profit from their imitation. In this article, we’ll take a look at the smart money sentiment surrounding Macquarie Infrastructure Corporation (NYSE:MICROPHONE).
Is Macquarie Infrastructure Corporation (NYSE:MICROPHONE) will take off soon? The best stock pickers were in a bullish mood. The number of bullish positions in hedge funds has increased by 2 lately. Macquarie Infrastructure Corporation (NYSE:MICROPHONE) appeared in 33 hedge fund portfolios at the end of March. The all-time high for this statistic is 69. Our calculations have also shown that MIC is not among the 30 most popular stocks among hedge funds (click for Q1 ranking).
The reputation of hedge funds as savvy investors has been tarnished over the past decade, as their hedged returns could not keep up with the unhedged returns of stock indices. Our research has shown that small-cap hedge fund stock selection managed to beat the market by double digits every year between 1999 and 2016, but the margin for outperformance has shrunk in recent years. Nonetheless, we were still able to identify in advance a select group of hedge funds that have outperformed S&P 500 ETFs by 115 percentage points since March 2017 (see details here). We were also able to identify in advance a select group of hedge funds that underperformed the market by 10 percentage points per year between 2006 and 2017. Interestingly, the margin of underperformance of these stocks has increased in recent years. Investors who are long in the market and short on these stocks would have reported more than 27% per year between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Nathaniel August of Mangrove Partners
At Insider Monkey, we scour multiple sources to uncover the next big investing idea. For example, lithium mining is one of the fastest growing industries right now, so we’re looking at stock locations like this. emerging lithium stocks. We go through lists like the 10 best EV stocks to choose the next Tesla which will offer a 10x return. Even though we only recommend positions in a tiny fraction of the companies we analyze, we check as many stocks as possible. We read letters from hedge fund investors and listen to market arguments at hedge fund conferences. You can subscribe to our free daily newsletter at our home page. Now we will see the key hedge fund action regarding Macquarie Infrastructure Corporation (NYSE:MICROPHONE).
Do hedge funds think MIC is a good stock to buy now?
At the end of the first quarter, 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from the previous quarter. By comparison, 30 hedge funds held stocks or bullish call options in MIC a year ago. So let’s take a look at which hedge funds were among the top stock holders and which hedge funds were making big moves.
Of these funds, Eminence Capital held the largest stake in Macquarie Infrastructure Corporation (NYSE: MIC), which stood at $ 224.3 million at the end of the fourth quarter. In second place was Sandbar Asset Management which raised $ 61.7 million in stocks. Rubric Capital Management, GAMCO Investors and Jet Capital Investors were also very fond of the stock, becoming one of the largest hedge fund holders in the company. In terms of portfolio weights assigned to each position Litespeed management assigned the largest weighting to Macquarie Infrastructure Corporation (NYSE: MIC), approximately 11.17% of its 13F portfolio. Sandbar Asset Management is also relatively very bullish on the stock, distributing 8.18% of its 13F equity portfolio to MIC.
As global interest grew, some big names were innovating themselves. Sandbar Asset Management, managed by Michael Cowley, was the largest position in Macquarie Infrastructure Corporation (NYSE: MIC). Sandbar Asset Management had invested $ 61.7 million in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also initiated a $ 24.3 million position during the quarter. Other funds with brand new MIC positions are Nathaniel August Mangrove Partners, the GLG partners of Noam Gottesman and Michael Bilger 59 North Capital.
Let’s look at hedge fund activity in other stocks – not necessarily in the same industry as Macquarie Infrastructure Corporation (NYSE: MIC) but of similar value. These stocks are CarGurus, Inc. (NASDAQ:CARG), Brady Corp (NYSE:BRC), Greif, Inc. (NYSE:FEM), Independent Bank Corp (NASDAQ:INDB), Axos Financial, Inc. (NYSE:CHOPPED), Fulton Financial Corp (NASDAQ:FULL) and INMODE LTD. (NASDAQ:INMD). All market capitalizations of these stocks correspond to MIC’s market capitalization.
[table] Ticker, number of HF with positions, total value of HF positions (x1000), change of position HF CARG, 29.266502, -4 BRC, 16.137441.1 GEF, 13.127687.0 INDB, 11.20641.4 AX, 13 36746.0 FULT, 7.37687, -8 INMD, 23.214212.0 Average, 16.120131, -1 [/table]
See the table here if you have formatting problems.
As you can see, these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $ 120 million. That figure was $ 663 million in the case of MIC. CarGurus, Inc. (NASDAQ:CARG) is the most popular action in this table. On the other hand, Fulton Financial Corp (NASDAQ:FULL) is the least popular with only 7 bullish hedge fund positions. Compared to these stocks, Macquarie Infrastructure Corporation (NYSE: MIC) is more popular among hedge funds. Our overall hedge fund sentiment score for MIC is 71.3. Stocks with a 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 have shown 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 returned 22.8% in 2021 through July 2, but still managed to beat the market by 6 percentage points. Hedge funds were also right to bet on MIC as the stock has returned 21.9% since the end of March (until 7/2) and outperformed the market by an even larger margin. Hedge funds were clearly right to accumulate in this stock relative to other stocks with similar market caps.
Receive real-time email alerts: Follow Macquarie Infrastructure Corp (NYSE: MIC)
Disclosure: none. This article originally appeared on Monkey initiate.