Is MYR Group Inc (NASDAQ:MYRG) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
MYR Group Inc (NASDAQ:MYRG) investors should pay attention to a decrease in hedge fund interest in recent months. MYRG was in 11 hedge funds’ portfolios at the end of June. There were 15 hedge funds in our database with MYRG holdings at the end of the previous quarter. Our calculations also showed that MYRG 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.
According to most market participants, hedge funds are assumed to be slow, old investment vehicles of years past. While there are more than 8000 funds trading at present, Our experts look at the bigwigs of this club, approximately 750 funds. Most estimates calculate that this group of people control bulk of all hedge funds’ total capital, and by monitoring their top equity investments, Insider Monkey has figured out various investment strategies that have historically outperformed Mr. Market. Insider Monkey’s flagship hedge fund strategy outperformed 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 glance at the recent hedge fund action encompassing MYR Group Inc (NASDAQ:MYRG).
How are hedge funds trading MYR Group Inc (NASDAQ:MYRG)?
At the end of the second quarter, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of -27% from the previous quarter. By comparison, 11 hedge funds held shares or bullish call options in MYRG 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, Third Avenue Management was the largest shareholder of MYR Group Inc (NASDAQ:MYRG), with a stake worth $12 million reported as of the end of March. Trailing Third Avenue Management was Arrowstreet Capital, which amassed a stake valued at $3 million. Millennium Management, Fisher Asset Management, and AQR Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
Seeing as MYR Group Inc (NASDAQ:MYRG) has witnessed bearish sentiment from the smart money, logic holds that there is a sect of money managers who were dropping their full holdings in the second quarter. At the top of the heap, Paul Marshall and Ian Wace’s Marshall Wace LLP dropped the largest investment of the 750 funds watched by Insider Monkey, valued at close to $2 million in stock, and Noam Gottesman’s GLG Partners was right behind this move, as the fund dropped about $1.4 million worth. These moves are important to note, as aggregate hedge fund interest fell by 4 funds in the second quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as MYR Group Inc (NASDAQ:MYRG) but similarly valued. These stocks are Corindus Vascular Robotics Inc (NYSE:CVRS), Watford Holdings Ltd. (NASDAQ:WTRE), Comstock Resources Inc (NYSE:CRK), and Veeco Instruments Inc. (NASDAQ:VECO). This group of stocks’ market values are similar to MYRG’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CVRS | 9 | 143517 | 1 |
| WTRE | 3 | 2639 | 3 |
| CRK | 4 | 4186 | -4 |
| VECO | 11 | 146565 | 1 |
| Average | 6.75 | 74227 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.75 hedge funds with bullish positions and the average amount invested in these stocks was $74 million. That figure was $26 million in MYRG’s case. Veeco Instruments Inc. (NASDAQ:VECO) is the most popular stock in this table. On the other hand Watford Holdings Ltd. (NASDAQ:WTRE) is the least popular one with only 3 bullish hedge fund positions. MYR Group Inc (NASDAQ:MYRG) is not the most popular stock in this group but hedge fund interest is still above average. 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 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. Unfortunately MYRG wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on MYRG were disappointed as the stock returned -16.2% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.
