The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Magic Software Enterprises Ltd. (NASDAQ:MGIC).
Magic Software Enterprises Ltd. (NASDAQ:MGIC) was in 4 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 4. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. MGIC investors should be aware of an increase in enthusiasm from smart money of late. There were 3 hedge funds in our database with MGIC positions at the end of the second quarter. Our calculations also showed that MGIC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most traders, hedge funds are seen as slow, outdated investment tools of the past. While there are more than 8000 funds with their doors open at the moment, We look at the top tier of this club, approximately 850 funds. These investment experts administer the majority of the smart money’s total asset base, and by observing their highest performing stock picks, Insider Monkey has discovered a number of investment strategies that have historically defeated the broader indices. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
Israel Englander of Millennium Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we’re going to view the recent hedge fund action surrounding Magic Software Enterprises Ltd. (NASDAQ:MGIC).
How have hedgies been trading Magic Software Enterprises Ltd. (NASDAQ:MGIC)?
At Q3’s end, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from the second quarter of 2020. On the other hand, there were a total of 2 hedge funds with a bullish position in MGIC a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, holds the most valuable position in Magic Software Enterprises Ltd. (NASDAQ:MGIC). Renaissance Technologies has a $8.3 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second most bullish fund manager is Citadel Investment Group, managed by Ken Griffin, which holds a $0.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions encompass Paul Marshall and Ian Wace’s Marshall Wace LLP, Israel Englander’s Millennium Management and . In terms of the portfolio weights assigned to each position Renaissance Technologies allocated the biggest weight to Magic Software Enterprises Ltd. (NASDAQ:MGIC), around 0.01% of its 13F portfolio. Marshall Wace LLP is also relatively very bullish on the stock, setting aside 0.0026 percent of its 13F equity portfolio to MGIC.
Now, key hedge funds were leading the bulls’ herd. Millennium Management, managed by Israel Englander, assembled the largest position in Magic Software Enterprises Ltd. (NASDAQ:MGIC). Millennium Management had $0.2 million invested in the company at the end of the quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Magic Software Enterprises Ltd. (NASDAQ:MGIC). We will take a look at Winmark Corporation (NASDAQ:WINA), HealthStream, Inc. (NASDAQ:HSTM), Petmed Express Inc (NASDAQ:PETS), Sinovac Biotech Ltd. (NASDAQ:SVA), Inogen Inc (NASDAQ:INGN), OFG Bancorp (NYSE:OFG), and B. Riley Financial, Inc. (NASDAQ:RILY). This group of stocks’ market valuations are similar to MGIC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WINA | 10 | 81784 | -3 |
| HSTM | 14 | 57652 | -3 |
| PETS | 19 | 112855 | 0 |
| SVA | 3 | 67010 | 0 |
| INGN | 19 | 37302 | 0 |
| OFG | 12 | 15248 | 1 |
| RILY | 19 | 88617 | 3 |
| Average | 13.7 | 65781 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.7 hedge funds with bullish positions and the average amount invested in these stocks was $66 million. That figure was $10 million in MGIC’s case. Petmed Express Inc (NASDAQ:PETS) is the most popular stock in this table. On the other hand Sinovac Biotech Ltd. (NASDAQ:SVA) is the least popular one with only 3 bullish hedge fund positions. Magic Software Enterprises Ltd. (NASDAQ:MGIC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MGIC is 39.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on MGIC as the stock returned 26.3% since the end of the third quarter (through 11/27) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
