Hedge Funds Are Coming Back To Medpace Holdings, Inc. (MEDP)

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Medpace Holdings, Inc. (NASDAQ:MEDP).

Is Medpace Holdings, Inc. (NASDAQ:MEDP) an exceptional investment now? Investors who are in the know were taking an optimistic view. The number of long hedge fund positions improved by 3 recently. Medpace Holdings, Inc. (NASDAQ:MEDP) was in 24 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 31. Our calculations also showed that MEDP isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

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. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. 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 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Ken Fisher of Fisher Asset Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind let’s take a look at the key hedge fund action encompassing Medpace Holdings, Inc. (NASDAQ:MEDP).

Do Hedge Funds Think MEDP Is A Good Stock To Buy Now?

At second quarter’s end, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 14% from the previous quarter. By comparison, 22 hedge funds held shares or bullish call options in MEDP a year ago. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).

More specifically, Echo Street Capital Management was the largest shareholder of Medpace Holdings, Inc. (NASDAQ:MEDP), with a stake worth $81.3 million reported as of the end of June. Trailing Echo Street Capital Management was Renaissance Technologies, which amassed a stake valued at $74.6 million. Fisher Asset Management, Arrowstreet Capital, and AQR Capital Management 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 Echo Street Capital Management allocated the biggest weight to Medpace Holdings, Inc. (NASDAQ:MEDP), around 0.63% of its 13F portfolio. Shanda Asset Management is also relatively very bullish on the stock, setting aside 0.63 percent of its 13F equity portfolio to MEDP.

With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Millennium Management, managed by Israel Englander, initiated the most outsized position in Medpace Holdings, Inc. (NASDAQ:MEDP). Millennium Management had $2 million invested in the company at the end of the quarter. Qing Li’s Sciencast Management also initiated a $0.6 million position during the quarter. The following funds were also among the new MEDP investors: Karim Abbadi and Edward McBride’s Centiva Capital and Matthew Hulsizer’s PEAK6 Capital Management.

Let’s now review hedge fund activity in other stocks similar to Medpace Holdings, Inc. (NASDAQ:MEDP). We will take a look at Grupo Aval Acciones y Valores S.A. (NYSE:AVAL), LHC Group, Inc. (NASDAQ:LHCG), Nexstar Media Group, Inc. (NASDAQ:NXST), MINISO Group Holding Limited (NYSE:MNSO), Biohaven Pharmaceutical Holding Company Ltd. (NYSE:BHVN), I-Mab (NASDAQ:IMAB), and MDU Resources Group Inc (NYSE:MDU). This group of stocks’ market valuations are similar to MEDP’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 20.1 hedge funds with bullish positions and the average amount invested in these stocks was $426 million. That figure was $337 million in MEDP’s case. Nexstar Media Group, Inc. (NASDAQ:NXST) is the most popular stock in this table. On the other hand Grupo Aval Acciones y Valores S.A. (NYSE:AVAL) is the least popular one with only 4 bullish hedge fund positions. Medpace Holdings, Inc. (NASDAQ:MEDP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MEDP is 64.6. 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 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 gained 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on MEDP as the stock returned 5.9% since the end of Q2 (through 10/22) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.