Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of MAXIMUS, Inc. (NYSE:MMS) based on that data.
MAXIMUS, Inc. (NYSE:MMS) shareholders have witnessed an increase in enthusiasm from smart money recently. MMS was in 26 hedge funds’ portfolios at the end of the first quarter of 2020. There were 24 hedge funds in our database with MMS holdings at the end of the previous quarter. Our calculations also showed that MMS 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.
In the eyes of most stock holders, hedge funds are assumed to be underperforming, old investment vehicles of yesteryear. While there are greater than 8000 funds trading at the moment, We choose to focus on the crème de la crème of this club, around 850 funds. It is estimated that this group of investors shepherd bulk of all hedge funds’ total capital, and by following their top picks, Insider Monkey has brought to light numerous investment strategies that have historically exceeded the market. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points a year 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 .
Noam Gottesman of GLG Partners
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a look at the fresh hedge fund action surrounding MAXIMUS, Inc. (NYSE:MMS).
Hedge fund activity in MAXIMUS, Inc. (NYSE:MMS)
Heading into the second quarter of 2020, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of 8% from the previous quarter. On the other hand, there were a total of 20 hedge funds with a bullish position in MMS a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, P2 Capital Partners held the most valuable stake in MAXIMUS, Inc. (NYSE:MMS), which was worth $44.1 million at the end of the third quarter. On the second spot was AQR Capital Management which amassed $28.1 million worth of shares. GLG Partners, Renaissance Technologies, and Royce & Associates 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 P2 Capital Partners allocated the biggest weight to MAXIMUS, Inc. (NYSE:MMS), around 5.28% of its 13F portfolio. 12th Street Asset Management is also relatively very bullish on the stock, setting aside 1.62 percent of its 13F equity portfolio to MMS.
As aggregate interest increased, some big names have jumped into MAXIMUS, Inc. (NYSE:MMS) headfirst. 12th Street Asset Management, managed by Michael O’Keefe, established the biggest position in MAXIMUS, Inc. (NYSE:MMS). 12th Street Asset Management had $4.3 million invested in the company at the end of the quarter. Benjamin A. Smith’s Laurion Capital Management also initiated a $1.3 million position during the quarter. The other funds with brand new MMS positions are Greg Eisner’s Engineers Gate Manager, Michael Gelband’s ExodusPoint Capital, and Jonathan Soros’s JS Capital.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as MAXIMUS, Inc. (NYSE:MMS) but similarly valued. We will take a look at PS Business Parks Inc (NYSE:PSB), HUYA Inc. (NYSE:HUYA), Woodward Inc (NASDAQ:WWD), and OneConnect Financial Technology Co., Ltd. (NYSE:OCFT). All of these stocks’ market caps are similar to MMS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PSB | 17 | 83370 | 2 |
| HUYA | 18 | 265315 | -3 |
| WWD | 24 | 222038 | 2 |
| OCFT | 3 | 1431 | -6 |
| Average | 15.5 | 143039 | -1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.5 hedge funds with bullish positions and the average amount invested in these stocks was $143 million. That figure was $133 million in MMS’s case. Woodward Inc (NASDAQ:WWD) is the most popular stock in this table. On the other hand OneConnect Financial Technology Co., Ltd. (NYSE:OCFT) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks MAXIMUS, Inc. (NYSE:MMS) is more popular among hedge funds. 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 returned 8.3% in 2020 through the end of May but still managed to beat the market by 13.2 percentage points. Hedge funds were also right about betting on MMS as the stock returned 24.3% so far in Q2 (through the end of May) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
