The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards MDC Partners Inc. (NASDAQ:MDCA).
Is MDC Partners Inc. (NASDAQ:MDCA) a safe investment today? Hedge funds seem to be getting less bullish, judging by the fact that the number of investors from our database long the stock slid by five last quarter. At the end of this article we will also compare MDCA to other stocks including Lumber Liquidators Holdings Inc (NYSE:LL), PennantPark Investment Corp. (NASDAQ:PNNT), and First Potomac Realty Trust (NYSE:FPO) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Now, let’s go over the latest action encompassing MDC Partners Inc. (NASDAQ:MDCA).
Hedge fund activity in MDC Partners Inc. (NASDAQ:MDCA)
Heading into the fourth quarter of 2016, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, down by 28% from the previous quarter. The graph below displays the number of hedge funds with bullish position in MDCA over the last 5 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Thomas E. Claugus’ GMT Capital has the number one position in MDC Partners Inc. (NASDAQ:MDCA), worth close to $30.7 million. The second most bullish fund manager is Richard Barrera’s Roystone Capital Partners holding a $27.6 million position; 1.7% of its 13F portfolio is allocated to the company. Other peers that are bullish comprise Phill Gross and Robert Atchinson’s Adage Capital Management, Amy Minella’s Cardinal Capital, and Leon Lowenstein’s Lionstone Capital Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Judging by the fact that MDC Partners Inc. (NASDAQ:MDCA) has encountered declining sentiment from the smart money, it’s safe to say that there were a few hedge funds that elected to cut their positions entirely in the third quarter. It’s worth mentioning that Principal Global Investors’ Columbus Circle Investors cashed in the biggest investment of the 700 funds studied by Insider Monkey, valued at close to $25.5 million in stock, and Robert Joseph Caruso’s Select Equity Group was right behind this move, as the fund said goodbye to about $6.3 million worth of shares.
Let’s check out hedge fund activity in other stocks similar to MDC Partners Inc. (NASDAQ:MDCA). We will take a look at Lumber Liquidators Holdings Inc (NYSE:LL), PennantPark Investment Corp. (NASDAQ:PNNT), First Potomac Realty Trust (NYSE:FPO), and Xenith Bankshares Inc (NASDAQ:XBKS). This group of stocks’ market valuations are similar to MDCA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LL | 14 | 62308 | 2 |
| PNNT | 5 | 1759 | 0 |
| FPO | 10 | 18800 | -3 |
| XBKS | 6 | 113282 | 6 |
As you can see these stocks had an average of nine funds with bullish positions and the average amount invested in these stocks was $49 million. That figure was $104 million in MDCA’s case. Lumber Liquidators Holdings Inc (NYSE:LL) is the most popular stock in this table. On the other hand PennantPark Investment Corp. (NASDAQ:PNNT) is the least popular one with only five bullish hedge fund positions. MDC Partners Inc. (NASDAQ:MDCA) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard LL might be a better candidate to consider taking a long position in.
Disclosure: None
