The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Mastech Digital, Inc. (NYSE:MHH).
Mastech Digital, Inc. (NYSE:MHH) has experienced an increase in hedge fund interest of late. MHH was in 4 hedge funds’ portfolios at the end of the first quarter of 2020. There were 2 hedge funds in our database with MHH positions at the end of the previous quarter. Our calculations also showed that MHH 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 has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 51 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Ken Griffin of Citadel Investment Group
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/dissed by legendary Bill Miller. 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. Now we’re going to take a look at the fresh hedge fund action surrounding Mastech Digital, Inc. (NYSE:MHH).
How have hedgies been trading Mastech Digital, Inc. (NYSE:MHH)?
At Q1’s end, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 100% from the previous quarter. On the other hand, there were a total of 2 hedge funds with a bullish position in MHH a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies has the most valuable position in Mastech Digital, Inc. (NYSE:MHH), worth close to $1.3 million, corresponding to less than 0.1%% of its total 13F portfolio. Coming in second is Millennium Management, managed by Israel Englander, which holds a $0.3 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining professional money managers that hold long positions comprise Ken Griffin’s Citadel Investment Group, Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital and . In terms of the portfolio weights assigned to each position Renaissance Technologies allocated the biggest weight to Mastech Digital, Inc. (NYSE:MHH), around 0.0012% of its 13F portfolio. Millennium Management is also relatively very bullish on the stock, setting aside 0.0007 percent of its 13F equity portfolio to MHH.
As one would reasonably expect, some big names have been driving this bullishness. Millennium Management, managed by Israel Englander, initiated the most valuable position in Mastech Digital, Inc. (NYSE:MHH). Millennium Management had $0.3 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0.1 million investment in the stock during the quarter.
Let’s go over hedge fund activity in other stocks similar to Mastech Digital, Inc. (NYSE:MHH). These stocks are Dyadic International, Inc. (NASDAQ:DYAI), Rockwell Medical Inc (NASDAQ:RMTI), Great Ajax Corp (NYSE:AJX), and Hersha Hospitality Trust (NYSE:HT). This group of stocks’ market caps are similar to MHH’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DYAI | 3 | 5386 | -5 |
| RMTI | 3 | 492 | 0 |
| AJX | 6 | 5670 | -2 |
| HT | 10 | 4305 | -5 |
| Average | 5.5 | 3963 | -3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.5 hedge funds with bullish positions and the average amount invested in these stocks was $4 million. That figure was $2 million in MHH’s case. Hersha Hospitality Trust (NYSE:HT) is the most popular stock in this table. On the other hand Dyadic International, Inc. (NASDAQ:DYAI) is the least popular one with only 3 bullish hedge fund positions. Mastech Digital, Inc. (NYSE:MHH) 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 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. A small number of hedge funds were also right about betting on MHH as the stock returned 43.6% during the second quarter and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.