As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the second quarter. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Milacron Holdings Corp (NYSE:MCRN).
Milacron Holdings Corp (NYSE:MCRN) was in 13 hedge funds’ portfolios at the end of the second quarter of 2019. MCRN shareholders have witnessed a decrease in activity from the world’s largest hedge funds of late. There were 24 hedge funds in our database with MCRN holdings at the end of the previous quarter. Our calculations also showed that MCRN isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most stock holders, hedge funds are seen as worthless, outdated financial vehicles of years past. While there are greater than 8000 funds trading at present, Our researchers hone in on the aristocrats of this club, around 750 funds. These money managers watch over most of the hedge fund industry’s total capital, and by keeping track of their finest investments, Insider Monkey has figured out many investment strategies that have historically defeated the market. Insider Monkey’s flagship hedge fund strategy surpassed the S&P 500 index by around 5 percentage points a year since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to take a look at the fresh hedge fund action regarding Milacron Holdings Corp (NYSE:MCRN).
What does smart money think about Milacron Holdings Corp (NYSE:MCRN)?
At Q2’s end, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -46% from the first quarter of 2019. On the other hand, there were a total of 21 hedge funds with a bullish position in MCRN a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Hawk Ridge Management was the largest shareholder of Milacron Holdings Corp (NYSE:MCRN), with a stake worth $13 million reported as of the end of March. Trailing Hawk Ridge Management was Royce & Associates, which amassed a stake valued at $12.7 million. GLG Partners, ACK Asset Management, and D E Shaw were also very fond of the stock, giving the stock large weights in their portfolios.
Judging by the fact that Milacron Holdings Corp (NYSE:MCRN) has experienced declining sentiment from the aggregate hedge fund industry, it’s easy to see that there were a few hedge funds who sold off their entire stakes by the end of the second quarter. Intriguingly, Ken Griffin’s Citadel Investment Group dropped the largest investment of all the hedgies watched by Insider Monkey, valued at close to $2.6 million in stock, and Israel Englander’s Millennium Management was right behind this move, as the fund said goodbye to about $2.4 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 11 funds by the end of the second quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Milacron Holdings Corp (NYSE:MCRN). We will take a look at Mercer International Inc. (NASDAQ:MERC), Kraton Corporation (NYSE:KRA), Oil States International, Inc. (NYSE:OIS), and Revlon Inc (NYSE:REV). This group of stocks’ market caps match MCRN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MERC | 16 | 159892 | 2 |
| KRA | 17 | 83773 | -2 |
| OIS | 9 | 35062 | -5 |
| REV | 31 | 307405 | 3 |
| Average | 18.25 | 146533 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.25 hedge funds with bullish positions and the average amount invested in these stocks was $147 million. That figure was $61 million in MCRN’s case. Revlon Inc (NYSE:REV) is the most popular stock in this table. On the other hand Oil States International, Inc. (NYSE:OIS) is the least popular one with only 9 bullish hedge fund positions. Milacron Holdings Corp (NYSE:MCRN) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on MCRN as the stock returned 20.8% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
