Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can’t match. So should one consider investing in Mobile Mini Inc (NASDAQ:MINI)? The smart money sentiment can provide an answer to this question.
Is Mobile Mini Inc (NASDAQ:MINI) a safe investment right now? Prominent investors are turning bullish. The number of long hedge fund positions inched up by 2 recently. Our calculations also showed that MINI isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (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 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to analyze the latest hedge fund action surrounding Mobile Mini Inc (NASDAQ:MINI).
Hedge fund activity in Mobile Mini Inc (NASDAQ:MINI)
At Q4’s end, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 15% from one quarter earlier. On the other hand, there were a total of 9 hedge funds with a bullish position in MINI a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
The largest stake in Mobile Mini Inc (NASDAQ:MINI) was held by Daruma Asset Management, which reported holding $20.7 million worth of stock at the end of December. It was followed by Fisher Asset Management with a $19 million position. Other investors bullish on the company included Royce & Associates, SG Capital Management, and Millennium Management.
Consequently, specific money managers were leading the bulls’ herd. SG Capital Management, managed by Ken Grossman and Glen Schneider, created the biggest position in Mobile Mini Inc (NASDAQ:MINI). SG Capital Management had $7.7 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also made a $2.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Benjamin A. Smith’s Laurion Capital Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Matthew Tewksbury’s Stevens Capital Management.
Let’s go over hedge fund activity in other stocks similar to Mobile Mini Inc (NASDAQ:MINI). We will take a look at Inphi Corporation (NYSE:IPHI), Scholastic Corp (NASDAQ:SCHL), Theravance Biopharma Inc (NASDAQ:TBPH), and Newmark Group, Inc. (NASDAQ:NMRK). All of these stocks’ market caps are similar to MINI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IPHI | 21 | 116576 | 7 |
| SCHL | 13 | 93687 | 2 |
| TBPH | 8 | 595309 | -3 |
| NMRK | 21 | 126737 | 4 |
| Average | 15.75 | 233077 | 2.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.75 hedge funds with bullish positions and the average amount invested in these stocks was $233 million. That figure was $78 million in MINI’s case. Inphi Corporation (NYSE:IPHI) is the most popular stock in this table. On the other hand Theravance Biopharma Inc (NASDAQ:TBPH) is the least popular one with only 8 bullish hedge fund positions. Mobile Mini Inc (NASDAQ:MINI) 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 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately MINI wasn’t nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); MINI investors were disappointed as the stock returned 9.5% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
