Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 750 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about MarineMax, Inc. (NYSE:HZO).
MarineMax, Inc. (NYSE:HZO) was in 10 hedge funds’ portfolios at the end of the third quarter of 2019. HZO investors should pay attention to an increase in support from the world’s most elite money managers recently. There were 7 hedge funds in our database with HZO positions at the end of the previous quarter. Our calculations also showed that HZO isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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 Russell 2000 ETFs by 40 percentage points since May 2014 (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 27.8% through November 21, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Cliff Asness of AQR Capital Management
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. 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. In December we recommended Adams Energy and the stock gained 20 percent. We’re going to view the fresh hedge fund action regarding MarineMax, Inc. (NYSE:HZO).
Hedge fund activity in MarineMax, Inc. (NYSE:HZO)
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 43% from one quarter earlier. On the other hand, there were a total of 13 hedge funds with a bullish position in HZO a year ago. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
Among these funds, Citadel Investment Group held the most valuable stake in MarineMax, Inc. (NYSE:HZO), which was worth $1.8 million at the end of the third quarter. On the second spot was Magnetar Capital which amassed $0.9 million worth of shares. PDT Partners, Algert Coldiron Investors, and AQR Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Algert Coldiron Investors allocated the biggest weight to MarineMax, Inc. (NYSE:HZO), around 0.13% of its 13F portfolio. PDT Partners is also relatively very bullish on the stock, dishing out 0.04 percent of its 13F equity portfolio to HZO.
As one would reasonably expect, key money managers have jumped into MarineMax, Inc. (NYSE:HZO) headfirst. Algert Coldiron Investors, managed by Peter Algert and Kevin Coldiron, initiated the most valuable position in MarineMax, Inc. (NYSE:HZO). Algert Coldiron Investors had $0.4 million invested in the company at the end of the quarter. Cliff Asness’s AQR Capital Management also made a $0.3 million investment in the stock during the quarter. The following funds were also among the new HZO investors: Paul Tudor Jones’s Tudor Investment Corp, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Mike Vranos’s Ellington.
Let’s go over hedge fund activity in other stocks similar to MarineMax, Inc. (NYSE:HZO). These stocks are Precision Drilling Corporation (NYSE:PDS), CytomX Therapeutics, Inc. (NASDAQ:CTMX), AC Immune SA (NASDAQ:ACIU), and BioLife Solutions, Inc. (NASDAQ:BLFS). This group of stocks’ market caps are closest to HZO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PDS | 12 | 15891 | 4 |
| CTMX | 19 | 60912 | 4 |
| ACIU | 7 | 65919 | 0 |
| BLFS | 11 | 81791 | -2 |
| Average | 12.25 | 56128 | 1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $56 million. That figure was $5 million in HZO’s case. CytomX Therapeutics, Inc. (NASDAQ:CTMX) is the most popular stock in this table. On the other hand AC Immune SA (NASDAQ:ACIU) is the least popular one with only 7 bullish hedge fund positions. MarineMax, Inc. (NYSE:HZO) is not the least popular stock in this group but hedge fund interest is still below average. 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. A small number of hedge funds were also right about betting on HZO, though not to the same extent, as the stock returned 7% during the first two months of the fourth quarter and outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.
