Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Monmouth R.E. Inv. Corp. (NYSE:MNR).
Monmouth R.E. Inv. Corp. (NYSE:MNR) shares didn’t see a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 9 hedge funds’ portfolios at the end of the third quarter of 2016, same as at the end of the second quarter. 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 Genomic Health, Inc. (NASDAQ:GHDX), Rush Enterprises, Inc. (NASDAQ:RUSHB), and Acorda Therapeutics Inc (NASDAQ:ACOR) to gather more data points.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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What have hedge funds been doing with Monmouth R.E. Inv. Corp. (NYSE:MNR)?
Heading into the fourth quarter of 2016, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, unchanged from the previous quarter. On the other hand, there were a total of 10 hedge funds with a bullish position in MNR at the beginning of this year, which rose to a peak of 11 by the end of March. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, J. Alan Reid, Jr. of Forward Management holds the largest position in Monmouth R.E. Inv. Corp. (NYSE:MNR). Forward Management has a $16.4 million position in the stock, comprising 1.2% of its 13F portfolio. On Forward Management’s heels is Renaissance Technologies, one of the largest hedge funds in the world, holding a $12 million position. Other hedge funds and institutional investors that are bullish consist of Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Cliff Asness’ AQR Capital Management, and John Overdeck and David Siegel’s Two Sigma Advisors. We should note that Forward Management is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-micro-cap stocks.
