With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter. One of these stocks was Medidata Solutions Inc (NASDAQ:MDSO).
Medidata Solutions Inc (NASDAQ:MDSO) has seen an increase in support from the world’s most elite money managers lately. Our calculations also showed that MDSO isn’t among the 30 most popular stocks among hedge funds.
In the eyes of most shareholders, hedge funds are viewed as slow, old financial vehicles of years past. While there are greater than 8000 funds with their doors open at the moment, Our experts hone in on the bigwigs of this group, about 750 funds. These investment experts control the majority of the smart money’s total capital, and by monitoring their highest performing stock picks, Insider Monkey has uncovered numerous investment strategies that have historically beaten the market. Insider Monkey’s flagship hedge fund strategy outrun the S&P 500 index by around 5 percentage points a year since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike this former hedge fund manager who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to review the latest hedge fund action regarding Medidata Solutions Inc (NASDAQ:MDSO).
How have hedgies been trading Medidata Solutions Inc (NASDAQ:MDSO)?
At Q2’s end, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 88% from the previous quarter. On the other hand, there were a total of 11 hedge funds with a bullish position in MDSO a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
The largest stake in Medidata Solutions Inc (NASDAQ:MDSO) was held by Alpine Associates, which reported holding $130.9 million worth of stock at the end of March. It was followed by Echo Street Capital Management with a $94.6 million position. Other investors bullish on the company included Magnetar Capital, Polar Capital, and Pentwater Capital Management.
With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. Alpine Associates, managed by Robert Emil Zoellner, established the most valuable position in Medidata Solutions Inc (NASDAQ:MDSO). Alpine Associates had $130.9 million invested in the company at the end of the quarter. Alec Litowitz and Ross Laser’s Magnetar Capital also made a $71 million investment in the stock during the quarter. The other funds with brand new MDSO positions are Matthew Halbower’s Pentwater Capital Management, John Orrico’s Water Island Capital, and John Thiessen’s Vertex One Asset Management.
Let’s now review hedge fund activity in other stocks similar to Medidata Solutions Inc (NASDAQ:MDSO). We will take a look at Versum Materials, Inc. (NYSE:VSM), JetBlue Airways Corporation (NASDAQ:JBLU), National Instruments Corporation (NASDAQ:NATI), and The New York Times Company (NYSE:NYT). All of these stocks’ market caps match MDSO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VSM | 36 | 913067 | -7 |
| JBLU | 27 | 637275 | 1 |
| NATI | 22 | 486653 | -6 |
| NYT | 41 | 1278691 | 9 |
| Average | 31.5 | 828922 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.5 hedge funds with bullish positions and the average amount invested in these stocks was $829 million. That figure was $534 million in MDSO’s case. The New York Times Company (NYSE:NYT) is the most popular stock in this table. On the other hand National Instruments Corporation (NASDAQ:NATI) is the least popular one with only 22 bullish hedge fund positions. Medidata Solutions Inc (NASDAQ:MDSO) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately MDSO wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); MDSO investors were disappointed as the stock returned 1.1% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks (see the video below) among hedge funds as many of these stocks already outperformed the market so far in 2019.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
