There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Jeff Ubben, George Soros and Carl Icahn think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other elite funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Banco Macro SA (NYSE:BMA).
Banco Macro SA (NYSE:BMA) shareholders have witnessed an increase in enthusiasm from smart money lately. Our calculations also showed that BMA isn’t among the 30 most popular stocks among hedge funds.
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’ 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 check out the key hedge fund action encompassing Banco Macro SA (NYSE:BMA).
How are hedge funds trading Banco Macro SA (NYSE:BMA)?
At the end of the fourth quarter, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 42% from the second quarter of 2018. On the other hand, there were a total of 17 hedge funds with a bullish position in BMA a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Odey Asset Management Group held the most valuable stake in Banco Macro SA (NYSE:BMA), which was worth $83.1 million at the end of the third quarter. On the second spot was EMS Capital which amassed $28.2 million worth of shares. Moreover, Millennium Management, Discovery Capital Management, and Horseman Capital Management were also bullish on Banco Macro SA (NYSE:BMA), allocating a large percentage of their portfolios to this stock.
As industrywide interest jumped, key hedge funds have been driving this bullishness. Horseman Capital Management, managed by John Horseman, assembled the biggest position in Banco Macro SA (NYSE:BMA). Horseman Capital Management had $9.7 million invested in the company at the end of the quarter. Joshua Friedman and Mitchell Julis’s Canyon Capital Advisors also initiated a $1.9 million position during the quarter. The other funds with brand new BMA positions are Parvinder Thiara’s Athanor Capital, Bruce J. Richards and Louis Hanover’s Marathon Asset Management, and Ken Griffin’s Citadel Investment Group.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Banco Macro SA (NYSE:BMA) but similarly valued. We will take a look at Cornerstone OnDemand, Inc. (NASDAQ:CSOD), TriNet Group Inc (NYSE:TNET), Mednax Inc. (NYSE:MD), and Hancock Whitney Corporation (NASDAQ:HWC). This group of stocks’ market values are similar to BMA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CSOD | 31 | 601148 | 3 |
| TNET | 17 | 233555 | -4 |
| MD | 25 | 480820 | 0 |
| HWC | 15 | 111721 | -9 |
| Average | 22 | 356811 | -2.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $357 million. That figure was $174 million in BMA’s case. Cornerstone OnDemand, Inc. (NASDAQ:CSOD) is the most popular stock in this table. On the other hand Hancock Whitney Corporation (NASDAQ:HWC) is the least popular one with only 15 bullish hedge fund positions. Banco Macro SA (NYSE:BMA) 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 BMA wasn’t nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); BMA investors were disappointed as the stock returned 6.3% 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.
