Is Mobile Mini Inc (NASDAQ:MINI) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
Is Mobile Mini Inc (NASDAQ:MINI) a healthy stock for your portfolio? Prominent investors are becoming less confident. The number of bullish hedge fund positions shrunk by 1 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 40 percentage points since May 2014 through May 30, 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 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Matthew Hulsizer of PEAK6 Capital
Let’s go over the new hedge fund action encompassing Mobile Mini Inc (NASDAQ:MINI).
How have hedgies been trading Mobile Mini Inc (NASDAQ:MINI)?
At the end of the first quarter, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of -7% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in MINI over the last 15 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Daruma Asset Management held the most valuable stake in Mobile Mini Inc (NASDAQ:MINI), which was worth $23.3 million at the end of the first quarter. On the second spot was Fisher Asset Management which amassed $19 million worth of shares. Moreover, SG Capital Management, Royce & Associates, and Millennium Management were also bullish on Mobile Mini Inc (NASDAQ:MINI), allocating a large percentage of their portfolios to this stock.
Since Mobile Mini Inc (NASDAQ:MINI) has witnessed a decline in interest from hedge fund managers, we can see that there is a sect of hedgies who were dropping their entire stakes last quarter. Interestingly, Peter Muller’s PDT Partners sold off the largest stake of all the hedgies monitored by Insider Monkey, comprising an estimated $0.7 million in stock, and Matthew Tewksbury’s Stevens Capital Management was right behind this move, as the fund dropped about $0.3 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 1 funds last quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Mobile Mini Inc (NASDAQ:MINI) but similarly valued. These stocks are Aircastle Limited (NYSE:AYR), Vector Group Ltd (NYSE:VGR), trivago N.V. (NASDAQ:TRVG), and Rush Enterprises, Inc. (NASDAQ:RUSHB). This group of stocks’ market caps match MINI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AYR | 12 | 82003 | -1 |
| VGR | 22 | 171934 | 2 |
| TRVG | 11 | 120462 | -2 |
| RUSHB | 3 | 37215 | 0 |
| Average | 12 | 102904 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $103 million. That figure was $97 million in MINI’s case. Vector Group Ltd (NYSE:VGR) is the most popular stock in this table. On the other hand Rush Enterprises, Inc. (NASDAQ:RUSHB) is the least popular one with only 3 bullish hedge fund positions. Mobile Mini Inc (NASDAQ:MINI) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but 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 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately MINI wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on MINI were disappointed as the stock returned -9.1% during the same period 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 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
