Here is What Hedge Funds Think About Memorial Resource Development Corp (MRD)

We can judge whether Memorial Resource Development Corp (NASDAQ:MRD) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, research shows that these picks historically outperformed the market when we factor in known risk factors.

Is Memorial Resource Development Corp (NASDAQ:MRD) worth your attention right now? The best stock pickers are betting on the stock. The number of long hedge fund positions went up by 3 in recent months. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article, we will examine companies such as Graham Holdings Co (NYSE:GHC), VWR Corp (NASDAQ:VWR), and SYNNEX Corporation (NYSE:SNX) to gather more data points.

In the 21st century investor’s toolkit, there are several metrics investors use to appraise stocks. Two of the most useful metrics are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the best investment managers can trounce their index-focused peers by a superb amount (see the details here).

With all of this in mind, let’s take a look at the latest action encompassing Memorial Resource Development Corp (NASDAQ:MRD).

What does the smart money think about Memorial Resource Development Corp (NASDAQ:MRD)?

At the end of the third quarter, a total of 30 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 11% from the second quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their stakes considerably (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Israel Englander’s Millennium Management has the biggest position in Memorial Resource Development Corp (NASDAQ:MRD), worth close to $122.8 million, accounting for 0.2% of its total 13F portfolio. On Millennium Management’s heels is Ken Griffin of Citadel Investment Group, with a $111.6 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors that are bullish consist of Phill Gross and Robert Atchinson’s Adage Capital Management, John Burbank’s Passport Capital, and Stuart J. Zimmer’s Zimmer Partners.

Consequently, key money managers were breaking ground themselves. Brenham Capital Management, managed by John Labanowski, initiated the most outsized position in Memorial Resource Development Corp (NASDAQ:MRD). Brenham Capital Management had $49.2 million invested in the company at the end of the quarter. Alec Litowitz and Ross Laser’s Magnetar Capital also made a $17.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Jacob Gottlieb’s Visium Asset Management, Lawrence Sapanski’s Scoria Capital, and Charles Jobson’s Delta Partners.

Let’s now take a look at the hedge fund activity in other stocks similar to Memorial Resource Development Corp (NASDAQ:MRD). We will take a look at Graham Holdings Co (NYSE:GHC), VWR Corp (NASDAQ:VWR), SYNNEX Corporation (NYSE:SNX), and WEX Inc (NYSE:WEX). This group of stocks’ market caps resembles Memorial Resource Development Corp (NASDAQ:MRD)’s market cap.

As you can see, these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $271 million. That figure was $645 million in Memorial Resource Development Corp (NASDAQ:MRD)’s case. Graham Holdings Co (NYSE:GHC) is the most popular stock in this table. On the other hand, SYNNEX Corporation (NYSE:SNX) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks, Memorial Resource Development Corp (NASDAQ:MRD) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.