Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of The Manitowoc Company, Inc. (NYSE:MTW) based on that data and determine whether they were really smart about the stock.
The Manitowoc Company, Inc. (NYSE:MTW) has seen an increase in hedge fund sentiment recently. Our calculations also showed that MTW isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.
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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (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 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Peter Rathjens of Arrowstreet Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. Cannabis stocks are roaring back in 2020, so we are checking out this under-the-radar stock. We go through lists like the 10 most profitable companies in the world 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. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. Now let’s view the fresh hedge fund action encompassing The Manitowoc Company, Inc. (NYSE:MTW).
What does smart money think about The Manitowoc Company, Inc. (NYSE:MTW)?
Heading into the second quarter of 2020, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of 24% from the fourth quarter of 2019. On the other hand, there were a total of 20 hedge funds with a bullish position in MTW 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.
More specifically, Firefly Value Partners was the largest shareholder of The Manitowoc Company, Inc. (NYSE:MTW), with a stake worth $22.7 million reported as of the end of September. Trailing Firefly Value Partners was Rutabaga Capital Management, which amassed a stake valued at $4 million. Millennium Management, Lodge Hill Capital, and Arrowstreet Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Firefly Value Partners allocated the biggest weight to The Manitowoc Company, Inc. (NYSE:MTW), around 4.28% of its 13F portfolio. Rutabaga Capital Management is also relatively very bullish on the stock, setting aside 2.39 percent of its 13F equity portfolio to MTW.
As one would reasonably expect, key money managers were leading the bulls’ herd. Renaissance Technologies, initiated the most outsized position in The Manitowoc Company, Inc. (NYSE:MTW). Renaissance Technologies had $1.6 million invested in the company at the end of the quarter. Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors also initiated a $0.2 million position during the quarter. The other funds with new positions in the stock are Cliff Asness’s AQR Capital Management, Noam Gottesman’s GLG Partners, and Minhua Zhang’s Weld Capital Management.
Let’s now review hedge fund activity in other stocks similar to The Manitowoc Company, Inc. (NYSE:MTW). These stocks are MetroCity Bankshares, Inc. (NASDAQ:MCBS), Powell Industries, Inc. (NASDAQ:POWL), Barrett Business Services, Inc. (NASDAQ:BBSI), and El Pollo LoCo Holdings Inc (NASDAQ:LOCO). This group of stocks’ market valuations are similar to MTW’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MCBS | 4 | 3819 | 0 |
| POWL | 13 | 33546 | -5 |
| BBSI | 13 | 39065 | 1 |
| LOCO | 9 | 3858 | -3 |
| Average | 9.75 | 20072 | -1.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.75 hedge funds with bullish positions and the average amount invested in these stocks was $20 million. That figure was $44 million in MTW’s case. Powell Industries, Inc. (NASDAQ:POWL) is the most popular stock in this table. On the other hand MetroCity Bankshares, Inc. (NASDAQ:MCBS) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks The Manitowoc Company, Inc. (NYSE:MTW) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 18.6% in 2020 through July 27th but still managed to beat the market by 17.1 percentage points. Hedge funds were also right about betting on MTW as the stock returned 37.2% since Q1 and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
