Is MasTec, Inc. (MTZ) A Good Stock To Buy?

With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter of 2021. One of these stocks was MasTec, Inc. (NYSE:MTZ).

Is MTZ a good stock to buy? MasTec, Inc. (NYSE:MTZ) shareholders have witnessed an increase in hedge fund sentiment in recent months. MasTec, Inc. (NYSE:MTZ) was in 36 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 41. There were 32 hedge funds in our database with MTZ holdings at the end of December. Our calculations also showed that MTZ isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

William Harnisch of Peconic Partners LLC

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to take a peek at the fresh hedge fund action encompassing MasTec, Inc. (NYSE:MTZ).

Do Hedge Funds Think MTZ Is A Good Stock To Buy Now?

At first quarter’s end, a total of 36 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from the previous quarter. The graph below displays the number of hedge funds with bullish position in MTZ over the last 23 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Pzena Investment Management, managed by Richard S. Pzena, holds the largest position in MasTec, Inc. (NYSE:MTZ). Pzena Investment Management has a $88.1 million position in the stock, comprising 0.4% of its 13F portfolio. The second most bullish fund manager is Electron Capital Partners, managed by Jos Shaver, which holds a $66.3 million position; the fund has 4.6% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that are bullish include William Harnisch’s Peconic Partners LLC, Dmitry Balyasny’s Balyasny Asset Management and Renaissance Technologies. In terms of the portfolio weights assigned to each position Electron Capital Partners allocated the biggest weight to MasTec, Inc. (NYSE:MTZ), around 4.59% of its 13F portfolio. Peconic Partners LLC is also relatively very bullish on the stock, designating 4.19 percent of its 13F equity portfolio to MTZ.

Now, specific money managers have been driving this bullishness. Renaissance Technologies, created the most outsized position in MasTec, Inc. (NYSE:MTZ). Renaissance Technologies had $16.8 million invested in the company at the end of the quarter. Todd J. Kantor’s Encompass Capital Advisors also made a $11.7 million investment in the stock during the quarter. The following funds were also among the new MTZ investors: Israel Englander’s Millennium Management, Charles Davidson and Joseph Jacobs’s Wexford Capital, and Matthew Hulsizer’s PEAK6 Capital Management.

Let’s now take a look at hedge fund activity in other stocks similar to MasTec, Inc. (NYSE:MTZ). We will take a look at Mattel, Inc. (NASDAQ:MAT), Grupo Aval Acciones y Valores S.A. (NYSE:AVAL), Ascendis Pharma A/S (NASDAQ:ASND), TopBuild Corp (NYSE:BLD), Lumentum Holdings Inc (NASDAQ:LITE), Coty Inc (NYSE:COTY), and Denali Therapeutics Inc. (NASDAQ:DNLI). This group of stocks’ market valuations are similar to MTZ’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 22.6 hedge funds with bullish positions and the average amount invested in these stocks was $558 million. That figure was $335 million in MTZ’s case. Lumentum Holdings Inc (NASDAQ:LITE) is the most popular stock in this table. On the other hand Grupo Aval Acciones y Valores S.A. (NYSE:AVAL) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks MasTec, Inc. (NYSE:MTZ) is more popular among hedge funds. Our overall hedge fund sentiment score for MTZ is 85.3. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks returned 19.3% in 2021 through June 25th but still managed to beat the market by 4.8 percentage points. Hedge funds were also right about betting on MTZ as the stock returned 14.9% since the end of March (through 6/25) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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Disclosure: None. This article was originally published at Insider Monkey.