At Insider Monkey, we pore over the filings of more than 700 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not MainSource Financial Group Inc. (NASDAQ:MSFG) makes for a good investment right now.
Is MainSource Financial Group Inc. (NASDAQ:MSFG) ready to rally soon? Investors who are in the know are buying. The number of long hedge fund bets improved by 1 in recent months. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as CNinsure Inc. (ADR) (NASDAQ:CISG), China Cord Blood Corp (NYSE:CO), and Cerus Corporation (NASDAQ:CERS) to gather more data points.
Follow Mainsource Financial Group (NASDAQ:MSFG)
Follow Mainsource Financial Group (NASDAQ:MSFG)
Today there are dozens of indicators investors put to use to evaluate publicly traded companies. A couple of the most useful indicators are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the best picks of the elite hedge fund managers can outclass the broader indices by a solid margin (see the details here).
Now, let’s take a gander at the key action encompassing MainSource Financial Group Inc. (NASDAQ:MSFG).
How are hedge funds trading MainSource Financial Group Inc. (NASDAQ:MSFG)?
Heading into Q4, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 33% from the second quarter. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Jim Simons’s Renaissance Technologies has the largest position in MainSource Financial Group Inc. (NASDAQ:MSFG), worth close to $5.3 million, comprising less than 0.1% of its total 13F portfolio. The second most bullish fund manager is Citadel Investment Group, led by Ken Griffin, holding a $0.3 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Remaining members of the smart money that hold long positions comprise Israel Englander’s Millennium Management, Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
As industrywide interest jumped, key money managers were breaking ground themselves. Citadel Investment Group, managed by Ken Griffin, created the most outsized position in MainSource Financial Group Inc. (NASDAQ:MSFG), worth $0.3 million as mentioned earlier. Israel Englander’s Millennium Management also made a $0.2 million investment in the stock during the quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as MainSource Financial Group Inc. (NASDAQ:MSFG) but similarly valued. We will take a look at CNinsure Inc. (ADR) (NASDAQ:CISG), China Cord Blood Corp (NYSE:CO), Cerus Corporation (NASDAQ:CERS), and iDreamSky Technology Ltd(ADR) (NASDAQ:DSKY). This group of stocks’ market valuations match MSFG’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CISG | 4 | 3706 | -4 |
| CO | 6 | 14221 | 1 |
| CERS | 11 | 118012 | 0 |
| DSKY | 5 | 3265 | -2 |
As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $35 million. That figure was a minor $6 million in MSFG’s case. Cerus Corporation (NASDAQ:CERS) is the most popular stock in this table, while CNinsure Inc. (ADR) (NASDAQ:CISG) is at the other end of the specter with only 4 bullish hedge fund positions. Compared to these stocks MainSource Financial Group Inc. (NASDAQ:MSFG) is even less popular than CISG. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
