It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 5.2% over the 12-month period ending October 30, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored S&P 500 stocks by the hedge funds monitored by Insider Monkey (as of September 2014) generated a return of 9.5% over the same time span, with 63% of these stocks outperforming the benchmark. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized in the financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in MVC Capital, Inc. (NYSE:MVC).
MVC Capital, Inc. (NYSE:MVC) investors should pay attention to a decrease in activity from the world’s largest hedge funds in recent months. MVC was in an 8 hedge funds’ portfolios at the end of the third quarter of 2015. There were 10 hedge funds in our database with MVC holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Merchants Bancshares,Inc. (NASDAQ:MBVT), Blueknight Energy Partners L.P. (NASDAQ:BKEP), and Five9 Inc (NASDAQ:FIVN) to gather more data points.
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In today’s marketplace there are numerous signals investors can use to evaluate stocks. A duo of the most underrated signals are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the top picks of the best fund managers can beat the market by a superb margin (see the details here).
With all of this in mind, we’re going to check out the fresh action surrounding MVC Capital, Inc. (NYSE:MVC).
What have hedge funds been doing with MVC Capital, Inc. (NYSE:MVC)?
At the end of the third quarter, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -20% from the previous quarter. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Chuck Royce’s Royce & Associates has the number one position in MVC Capital, Inc. (NYSE:MVC), worth close to $10.1 million, comprising 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Dov Gertzulin of DG Capital Management, with a $6.9 million position; the fund has an 8% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish consist of Nelson Obus’s Wynnefield Capital, D. E. Shaw and Paul J. Isaac’s Arbiter Partners Capital Management.
Seeing as MVC Capital, Inc. (NYSE:MVC) has experienced falling interest from hedge fund managers, it’s safe to say that there were a few money managers that decided to sell off their entire stakes by the end of the third quarter. Intriguingly, Phillip Goldstein, Andrew Dakos and Steven Samuels’s Bulldog Investors dumped the largest position of the “upper crust” of funds watched by Insider Monkey, worth close to $14.4 million in stock.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as MVC Capital, Inc. (NYSE:MVC) but similarly valued. We will take a look at Merchants Bancshares,Inc. (NASDAQ:MBVT), Blueknight Energy Partners L.P. (NASDAQ:BKEP), Five9 Inc (NASDAQ:FIVN), and North Atlantic Drilling Ltd. (NYSE:NADL). This group of stocks’ market values resemble MVC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MBVT | 4 | 6625 | 0 |
| BKEP | 5 | 36682 | 1 |
| FIVN | 7 | 9920 | -6 |
| NADL | 4 | 4822 | -1 |
As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $15 million. Five9 Inc (NASDAQ:FIVN) is the most popular stock in this table, while Merchants Bancshares,Inc. (NASDAQ:MBVT) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks MVC Capital, Inc. (NYSE:MVC) is more popular among hedge funds. Moreover, hedge funds hold $24 million worth of MVC’s stock. Considering that the smart money is fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
