Hedge Funds Are Piling Into Maverix Metals Inc. (MMX)

In this article we will check out the progression of hedge fund sentiment towards Maverix Metals Inc. (NYSE:MMX) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

Is Maverix Metals Inc. (NYSE:MMX) a superb investment today? Prominent investors were taking an optimistic view. The number of long hedge fund bets rose by 4 recently. Maverix Metals Inc. (NYSE:MMX) was in 10 hedge funds’ portfolios at the end of June. The all time high for this statistic is 9. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that MMX isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

According to most shareholders, hedge funds are assumed to be underperforming, outdated financial tools of the past. While there are greater than 8000 funds trading at present, Our researchers hone in on the masters of this club, about 850 funds. It is estimated that this group of investors command the majority of all hedge funds’ total asset base, and by shadowing their top investments, Insider Monkey has unsheathed many investment strategies that have historically outstripped the broader indices. Insider Monkey’s flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

Eric Sprott of Sprott Asset Management

With all of this in mind let’s take a gander at the new hedge fund action encompassing Maverix Metals Inc. (NYSE:MMX).

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

At second quarter’s end, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 67% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in MMX over the last 24 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Maverix Metals Inc. (NYSE:MMX) was held by Sprott Asset Management, which reported holding $28.4 million worth of stock at the end of June. It was followed by Renaissance Technologies with a $1.7 million position. Other investors bullish on the company included Citadel Investment Group, D E Shaw, and Knoll Capital Management. In terms of the portfolio weights assigned to each position Sprott Asset Management allocated the biggest weight to Maverix Metals Inc. (NYSE:MMX), around 1.66% of its 13F portfolio. Knoll Capital Management is also relatively very bullish on the stock, dishing out 0.32 percent of its 13F equity portfolio to MMX.

Now, specific money managers have been driving this bullishness. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, created the biggest position in Maverix Metals Inc. (NYSE:MMX). Marshall Wace LLP had $0.4 million invested in the company at the end of the quarter. Murray Stahl’s Horizon Asset Management also initiated a $0.4 million position during the quarter. The only other fund with a new position in the stock is Greg Eisner’s Engineers Gate Manager.

Let’s go over hedge fund activity in other stocks similar to Maverix Metals Inc. (NYSE:MMX). We will take a look at Bristow Group, Inc. (NYSE:VTOL), Myers Industries, Inc. (NYSE:MYE), State Auto Financial Corporation (NASDAQ:STFC), Argan, Inc. (NYSE:AGX), 111, Inc. (NASDAQ:YI), 22nd Century Group, Inc (NASDAQ:XXII), and Gravity Co., LTD. (NASDAQ:GRVY). All of these stocks’ market caps are closest to MMX’s market cap.

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As you can see these stocks had an average of 8.3 hedge funds with bullish positions and the average amount invested in these stocks was $61 million. That figure was $34 million in MMX’s case. Bristow Group, Inc. (NYSE:VTOL) is the most popular stock in this table. On the other hand 111, Inc. (NASDAQ:YI) is the least popular one with only 4 bullish hedge fund positions. Maverix Metals Inc. (NYSE:MMX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MMX is 69. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 25.7% in 2021 through September 27th and beat the market again by 6.2 percentage points. Unfortunately MMX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on MMX were disappointed as the stock returned -16.5% since the end of June (through 9/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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