Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Mesa Air Group, Inc. (NASDAQ:MESA).
Mesa Air Group, Inc. (NASDAQ:MESA) investors should pay attention to an increase in support from the world’s most elite money managers recently. MESA was in 19 hedge funds’ portfolios at the end of June. There were 17 hedge funds in our database with MESA holdings at the end of the previous quarter. Our calculations also showed that MESA isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
In addition to following the biggest hedge funds for investment ideas, we also share stock pitches from conferences, investor letters and other sources like this one where the fund manager is talking about two under the radar 1000% return potential stocks: first one in internet infrastructure and the second in the heart of advertising market. We use hedge fund buy/sell signals to determine whether to conduct in-depth analysis of these stock ideas which take days. Let’s take a look at the fresh hedge fund action encompassing Mesa Air Group, Inc. (NASDAQ:MESA).
What have hedge funds been doing with Mesa Air Group, Inc. (NASDAQ:MESA)?
Heading into the third quarter of 2019, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 12% from one quarter earlier. By comparison, 0 hedge funds held shares or bullish call options in MESA a year ago. 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 Mesa Air Group, Inc. (NASDAQ:MESA) was held by MSDC Management, which reported holding $11.8 million worth of stock at the end of March. It was followed by Whitebox Advisors with a $9.3 million position. Other investors bullish on the company included Owl Creek Asset Management, Driehaus Capital, and Citadel Investment Group.
As one would reasonably expect, key money managers were leading the bulls’ herd. Renaissance Technologies created the most valuable position in Mesa Air Group, Inc. (NASDAQ:MESA). Renaissance Technologies had $3.9 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $0.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management and John Overdeck and David Siegel’s Two Sigma Advisors.
Let’s check out hedge fund activity in other stocks similar to Mesa Air Group, Inc. (NASDAQ:MESA). These stocks are Bluerock Residential Growth REIT Inc (NYSEMKT:BRG), Martin Midstream Partners L.P. (NASDAQ:MMLP), Civeo Corporation (NYSE:CVEO), and BayCom Corp (NASDAQ:BCML). All of these stocks’ market caps are closest to MESA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BRG | 11 | 19768 | 1 |
| MMLP | 2 | 1925 | 1 |
| CVEO | 13 | 117309 | -1 |
| BCML | 4 | 22239 | 0 |
| Average | 7.5 | 40310 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.5 hedge funds with bullish positions and the average amount invested in these stocks was $40 million. That figure was $63 million in MESA’s case. Civeo Corporation (NYSE:CVEO) is the most popular stock in this table. On the other hand Martin Midstream Partners L.P. (NASDAQ:MMLP) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Mesa Air Group, Inc. (NASDAQ:MESA) is more popular among hedge funds. 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 MESA wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on MESA were disappointed as the stock returned -26.1% 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 among hedge funds as many of these stocks already outperformed the market in Q3.
Disclosure: None. This article was originally published at Insider Monkey.
