Hedge funds are not perfect. They have their bad picks just like everyone else. Valeant, a stock hedge funds have loved, lost 79% during the last 12 months ending in November 21. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 30 mid-cap stocks among the best performing hedge funds yielded an average return of 18% in the same time period, vs. a gain of 7.6% for the S&P 500 Index. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of Macquarie Infrastructure Corp (NYSE:MIC).
We should mention that the company registered a slight decrease in enthusiasm from smart money, as the number of funds from our database long Macquarie Infrastructure declined to 45 from 47 during the third quarter. However, 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 United Rentals, Inc. (NYSE:URI), STERIS Corp (NYSE:STE), and Michaels Companies Inc (NASDAQ:MIK) to gather more data points.
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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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How are hedge funds trading Macquarie Infrastructure Corp (NYSE:MIC)?
A total of 45 investors tracked by Insider Monkey were long Macquarie Infrastructure Corp, which represents a decline of 4% from the previous quarter, the 4th-straight quarter with a decline in hedge fund ownership. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Marc Lisker, Glenn Fuhrman and John Phelan’s MSDC Management has the largest position in Macquarie Infrastructure Corp (NYSE:MIC), worth close to $192 million, corresponding to 15.5% of its total 13F portfolio. The second most bullish fund manager is Joshua Kaufman and Craig Nerenberg of Brenner West Capital Partners, with a $160.5 million position; 14.3% of its 13F portfolio is allocated to the stock. Some other professional money managers that hold long positions contain Bernard Selz’s Selz Capital, Robert Boucai’s Newbrook Capital Advisors, and Dmitry Balyasny’s Balyasny Asset Management.
Seeing as Macquarie Infrastructure Company LLC (NYSE:MIC) has experienced a bearish sentiment from hedge fund managers, logic holds that there lies a certain “tier” of money managers that decided to sell off their entire stakes in the third quarter. Intriguingly, Ken Griffin’s Citadel Investment Group dropped the largest stake of the 700 funds followed by Insider Monkey, valued at about $5.1 million in stock. Jacob Gottlieb’s fund, Visium Asset Management, also dumped its stock, about $4.3 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 2 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar toMacquarie Infrastructure Corp (NYSE:MIC). These stocks are United Rentals, Inc. (NYSE:URI), STERIS Corp (NYSE:STE), Michaels Companies Inc (NASDAQ:MIK), and Flowserve Corporation (NYSE:FLS). All of these stocks’ market caps match MIC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| URI | 43 | 539688 | 6 |
| STE | 22 | 628862 | -8 |
| MIK | 23 | 510205 | 1 |
| FLS | 26 | 402485 | -6 |
As you can see these stocks had an average of 29 funds with bullish positions at the end of September and the average amount invested in these stocks was $520 million. That figure was $1.06 billion in MIC’s case. United Rentals, Inc. (NYSE:URI) is the most popular stock in this table. On the other hand STERIS Corp (NYSE:STE) is the least popular one with only 22 bullish hedge fund positions. Compared to these stocksMacquarie Infrastructure Corp (NYSE:MIC) 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.
Disclosure: None
