Hedge Funds Are Piling Into Moelis & Company (MC)

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on September 30th. We at Insider Monkey have made an extensive database of more than 867 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Moelis & Company (NYSE:MC) based on those filings.

Moelis & Company (NYSE:MC) investors should be aware of an increase in hedge fund interest recently. Moelis & Company (NYSE:MC) was in 25 hedge funds’ portfolios at the end of September. The all time high for this statistic was previously 23. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 18 hedge funds in our database with MC holdings at the end of June. Our calculations also showed that MC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. With all of this in mind let’s go over the new hedge fund action surrounding Moelis & Company (NYSE:MC).

Ken Griffin of Citadel Investment Group

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

At Q3’s end, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of 39% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in MC over the last 25 quarters. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).

Among these funds, Royce & Associates held the most valuable stake in Moelis & Company (NYSE:MC), which was worth $43.7 million at the end of the third quarter. On the second spot was Heard Capital which amassed $29.1 million worth of shares. Renaissance Technologies, Citadel Investment Group, and Balyasny Asset 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 Heard Capital allocated the biggest weight to Moelis & Company (NYSE:MC), around 5.64% of its 13F portfolio. Gillson Capital is also relatively very bullish on the stock, earmarking 0.47 percent of its 13F equity portfolio to MC.

Consequently, specific money managers were leading the bulls’ herd. Schonfeld Strategic Advisors, managed by Ryan Tolkin (CIO), initiated the most valuable position in Moelis & Company (NYSE:MC). Schonfeld Strategic Advisors had $7.1 million invested in the company at the end of the quarter. Daniel Johnson’s Gillson Capital also initiated a $6.4 million position during the quarter. The other funds with brand new MC positions are Peter Seuss’s Prana Capital Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Karim Abbadi and Edward McBride’s Centiva Capital.

Let’s now take a look at hedge fund activity in other stocks similar to Moelis & Company (NYSE:MC). These stocks are Summit Materials Inc (NYSE:SUM), Fabrinet (NYSE:FN), MaxLinear, Inc. Common Stock (NYSE:MXL), MultiPlan Corporation (NYSE:MPLN), Brighthouse Financial, Inc. (NASDAQ:BHF), Atlas Corp. (NYSE:ATCO), and Investors Bancorp, Inc. (NASDAQ:ISBC). All of these stocks’ market caps are closest to MC’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $387 million. That figure was $147 million in MC’s case. Brighthouse Financial, Inc. (NASDAQ:BHF) is the most popular stock in this table. On the other hand Atlas Corp. (NYSE:ATCO) is the least popular one with only 15 bullish hedge fund positions. Moelis & Company (NYSE:MC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MC is 75.7. 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 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately MC wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on MC were disappointed as the stock returned 1.5% since the end of September (through 12/9) 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.