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 Matson, Inc. (NYSE:MATX) based on that data.
Is Matson, Inc. (NYSE:MATX) a safe investment today? Prominent investors are taking a pessimistic view. The number of bullish hedge fund positions were trimmed by 7 lately. Our calculations also showed that MATX 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.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 44 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
John Overdeck of Two Sigma Advisors
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. We interview hedge fund managers and ask them about their best ideas. You can watch our latest hedge fund manager interview here and find out the name of the large-cap healthcare stock that Sio Capital’s Michael Castor expects to double. 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 S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s analyze the key hedge fund action regarding Matson, Inc. (NYSE:MATX).
How are hedge funds trading Matson, Inc. (NYSE:MATX)?
Heading into the second quarter of 2020, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -70% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards MATX over the last 18 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.
The largest stake in Matson, Inc. (NYSE:MATX) was held by Tensile Capital, which reported holding $4.6 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $1.3 million position. The only other hedge fund that is bullish on the company was Two Sigma Advisors.
Judging by the fact that Matson, Inc. (NYSE:MATX) has faced declining sentiment from the smart money, logic holds that there is a sect of hedgies that elected to cut their full holdings by the end of the third quarter. It’s worth mentioning that Renaissance Technologies said goodbye to the biggest investment of the “upper crust” of funds tracked by Insider Monkey, comprising about $1.6 million in stock. Minhua Zhang’s fund, Weld Capital Management, also said goodbye to its stock, about $1.6 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 7 funds by the end of the third quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Matson, Inc. (NYSE:MATX) but similarly valued. We will take a look at Fresh Del Monte Produce Inc (NYSE:FDP), SkyWest, Inc. (NASDAQ:SKYW), Herman Miller, Inc. (NASDAQ:MLHR), and Evoqua Water Technologies Corp. (NYSE:AQUA). This group of stocks’ market values resemble MATX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FDP | 6 | 28077 | -5 |
| SKYW | 18 | 83716 | 3 |
| MLHR | 22 | 111991 | -2 |
| AQUA | 28 | 124642 | 7 |
| Average | 18.5 | 87107 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.5 hedge funds with bullish positions and the average amount invested in these stocks was $87 million. That figure was $6 million in MATX’s case. Evoqua Water Technologies Corp. (NYSE:AQUA) is the most popular stock in this table. On the other hand Fresh Del Monte Produce Inc (NYSE:FDP) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Matson, Inc. (NYSE:MATX) is even less popular than FDP. Hedge funds dodged a bullet by taking a bearish stance towards MATX. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 7.9% in 2020 through May 22nd but managed to beat the market by 15.6 percentage points. Unfortunately MATX wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); MATX investors were disappointed as the stock returned -12.7% during the second quarter (through May 22nd) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.
