Hedge Funds Are Souring On Medpace Holdings, Inc. (MEDP)

Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Medpace Holdings, Inc. (NASDAQ:MEDP).

Is Medpace Holdings, Inc. (NASDAQ:MEDP) a healthy stock for your portfolio? Prominent investors were getting less bullish. The number of bullish hedge fund positions fell by 1 lately. Medpace Holdings, Inc. (NASDAQ:MEDP) was in 23 hedge funds’ portfolios at the end of the third 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 Q3 rankings).

Peter Algert of Algert Global

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 we’re going to take a look at the new hedge fund action encompassing Medpace Holdings, Inc. (NASDAQ:MEDP).

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

At third quarter’s end, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from the previous quarter. The graph below displays the number of hedge funds with bullish position in MEDP over the last 25 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.

According to Insider Monkey’s hedge fund database, Echo Street Capital Management, managed by Greg Poole, holds the biggest position in Medpace Holdings, Inc. (NASDAQ:MEDP). Echo Street Capital Management has a $119.8 million position in the stock, comprising 0.8% of its 13F portfolio. The second most bullish fund manager is Renaissance Technologies, which holds a $78.3 million position; 0.1% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that hold long positions comprise Ken Fisher’s Fisher Asset Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Richard Driehaus’s Driehaus Capital. 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 0.84% of its 13F portfolio. Shanda Asset Management is also relatively very bullish on the stock, dishing out 0.57 percent of its 13F equity portfolio to MEDP.

Seeing as Medpace Holdings, Inc. (NASDAQ:MEDP) has witnessed declining sentiment from hedge fund managers, it’s easy to see that there lies a certain “tier” of hedgies that elected to cut their positions entirely heading into Q4. Intriguingly, Steve Cohen’s Point72 Asset Management dropped the biggest stake of all the hedgies followed by Insider Monkey, worth about $13.4 million in call options. Matthew Hulsizer’s fund, PEAK6 Capital Management, also dropped its call options, about $1.3 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 1 funds heading into Q4.

Let’s go over hedge fund activity in other stocks similar to Medpace Holdings, Inc. (NASDAQ:MEDP). These stocks are Kinross Gold Corporation (NYSE:KGC), TopBuild Corp (NYSE:BLD), Envista Holdings Corporation (NYSE:NVST), American Campus Communities, Inc. (NYSE:ACC), Eastgroup Properties Inc (NYSE:EGP), Toll Brothers Inc (NYSE:TOL), and First Industrial Realty Trust, Inc. (NYSE:FR). This group of stocks’ market caps resemble MEDP’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 23.3 hedge funds with bullish positions and the average amount invested in these stocks was $399 million. That figure was $424 million in MEDP’s case. Envista Holdings Corporation (NYSE:NVST) is the most popular stock in this table. On the other hand Eastgroup Properties Inc (NYSE:EGP) is the least popular one with only 13 bullish hedge fund positions. Medpace Holdings, Inc. (NASDAQ:MEDP) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MEDP is 51.3. 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. A small number of hedge funds were also right about betting on MEDP as the stock returned 9% since the end of the third quarter (through 12/9) and outperformed the market by an even larger margin.

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

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