The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. Now, we are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article you are going to find out whether hedge funds thoughtMYR Group Inc (NASDAQ:MYRG) was a good investment heading into the second quarter and how the stock traded in comparison to the top hedge fund picks.
MYR Group Inc (NASDAQ:MYRG) investors should be aware of a decrease in enthusiasm from smart money lately. Our calculations also showed that MYRG isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most investors, hedge funds are seen as slow, old investment vehicles of the past. While there are greater than 8000 funds trading at the moment, Our researchers choose to focus on the moguls of this club, about 850 funds. Most estimates calculate that this group of people manage most of the smart money’s total capital, and by observing their first-class stock picks, Insider Monkey has found many investment strategies that have historically exceeded the market. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Cliff Asness of AQR Capital Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s go over the recent hedge fund action surrounding MYR Group Inc (NASDAQ:MYRG).
How have hedgies been trading MYR Group Inc (NASDAQ:MYRG)?
Heading into the second quarter of 2020, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -17% from one quarter earlier. On the other hand, there were a total of 15 hedge funds with a bullish position 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 $10 million reported as of the end of September. Trailing Third Avenue Management was AQR Capital Management, which amassed a stake valued at $4 million. Arrowstreet Capital, Citadel Investment Group, and Millennium 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 Third Avenue Management allocated the biggest weight to MYR Group Inc (NASDAQ:MYRG), around 1.49% of its 13F portfolio. AQR Capital Management is also relatively very bullish on the stock, earmarking 0.01 percent of its 13F equity portfolio to MYRG.
Because MYR Group Inc (NASDAQ:MYRG) has faced falling interest from the entirety of the hedge funds we track, logic holds that there were a few hedge funds that slashed their full holdings heading into Q4. It’s worth mentioning that Chuck Royce’s Royce & Associates dumped the biggest stake of the “upper crust” of funds monitored by Insider Monkey, totaling about $0.1 million in stock, and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital was right behind this move, as the fund cut about $0 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 2 funds heading into Q4.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as MYR Group Inc (NASDAQ:MYRG) but similarly valued. These stocks are Heska Corp (NASDAQ:HSKA), Neoleukin Therapeutics, Inc. (NASDAQ:NLTX), Cellcom Israel Ltd. (NYSE:CEL), and DBV Technologies SA (NASDAQ:DBVT). This group of stocks’ market values resemble MYRG’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HSKA | 15 | 50445 | 2 |
| NLTX | 20 | 197499 | 0 |
| CEL | 1 | 11104 | -1 |
| DBVT | 10 | 115317 | -3 |
| Average | 11.5 | 93591 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.5 hedge funds with bullish positions and the average amount invested in these stocks was $94 million. That figure was $24 million in MYRG’s case. Neoleukin Therapeutics, Inc. (NASDAQ:NLTX) is the most popular stock in this table. On the other hand Cellcom Israel Ltd. (NYSE:CEL) is the least popular one with only 1 bullish hedge fund positions. MYR Group Inc (NASDAQ:MYRG) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.3% in 2020 through June 30th but beat the market by 15.5 percentage points. A small number of hedge funds were also right about betting on MYRG, though not to the same extent, as the stock returned 21.8% during the second quarter and outperformed the market.
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Disclosure: None. This article was originally published at Insider Monkey.
