The first quarter was a breeze as Powell pivoted, and China seemed eager to reach a deal with Trump. Both the S&P 500 and Russell 2000 delivered very strong gains as a result, with the Russell 2000, which is composed of smaller companies, outperforming the large-cap stocks slightly during the first quarter. Unfortunately sentiment shifted in May and August as this time China pivoted and Trump put more pressure on China by increasing tariffs. Fourth quarter brought optimism to the markets and hedge funds’ top 20 stock picks performed spectacularly in this volatile environment. These stocks delivered a total gain of 37.4% through the end of November, vs. a gain of 27.5% for the S&P 500 ETF. In this article we will look at how this market volatility affected the sentiment of hedge funds towards Maiden Holdings, Ltd. (NASDAQ:MHLD), and what that likely means for the prospects of the company and its stock.
Is Maiden Holdings, Ltd. (NASDAQ:MHLD) a superb stock to buy now? Hedge funds are getting more bullish. The number of bullish hedge fund bets inched up by 1 in recent months. Our calculations also showed that MHLD isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). MHLD was in 10 hedge funds’ portfolios at the end of September. There were 9 hedge funds in our database with MHLD holdings at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
At the moment there are numerous tools stock traders put to use to evaluate stocks. A pair of the most under-the-radar tools are hedge fund and insider trading interest. We have shown that, historically, those who follow the best picks of the elite investment managers can trounce their index-focused peers by a healthy amount (see the details here).
John Overdeck of Two Sigma Advisors
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s check out the latest hedge fund action encompassing Maiden Holdings, Ltd. (NASDAQ:MHLD).
What does smart money think about Maiden Holdings, Ltd. (NASDAQ:MHLD)?
Heading into the fourth quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 11% from one quarter earlier. On the other hand, there were a total of 9 hedge funds with a bullish position in MHLD 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 Insider Monkey’s hedge fund database, 683 Capital Partners, managed by Ari Zweiman, holds the largest position in Maiden Holdings, Ltd. (NASDAQ:MHLD). 683 Capital Partners has a $5.9 million position in the stock, comprising 0.7% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, with a $0.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish include Israel Englander’s Millennium Management, Cliff Asness’s AQR Capital Management and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position 683 Capital Partners allocated the biggest weight to Maiden Holdings, Ltd. (NASDAQ:MHLD), around 0.66% of its 13F portfolio. Paloma Partners is also relatively very bullish on the stock, earmarking 0.0018 percent of its 13F equity portfolio to MHLD.
There weren’t any hedge funds initiating brand new positions in the stock during the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Maiden Holdings, Ltd. (NASDAQ:MHLD). We will take a look at Chaparral Energy, Inc. (NYSE:CHAP), Natural Alternatives International, Inc. (NASDAQ:NAII), Sorl Auto Parts, Inc. (NASDAQ:SORL), and Opiant Pharmaceuticals, Inc. (NASDAQ:OPNT). This group of stocks’ market values are closest to MHLD’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CHAP | 12 | 34343 | 0 |
| NAII | 1 | 4501 | 0 |
| SORL | 2 | 420 | 0 |
| OPNT | 2 | 4520 | 1 |
| Average | 4.25 | 10946 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 4.25 hedge funds with bullish positions and the average amount invested in these stocks was $11 million. That figure was $8 million in MHLD’s case. Chaparral Energy, Inc. (NYSE:CHAP) is the most popular stock in this table. On the other hand Natural Alternatives International, Inc. (NASDAQ:NAII) is the least popular one with only 1 bullish hedge fund positions. Maiden Holdings, Ltd. (NASDAQ:MHLD) 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 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately MHLD wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on MHLD were disappointed as the stock returned 1.3% during the fourth quarter (through the end of November) 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 many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.
