Looking for stocks with high upside potential? Just follow the big players within the hedge fund industry. Why should you do so? Let’s take a brief look at what statistics have to say about hedge funds’ stock picking abilities to illustrate. The Standard and Poor’s 500 Index returned approximately 5.7% in the 12 months ending October 26 (including dividend payments). Conversely, hedge funds’ 30 preferred S&P 500 stocks (as of June 2014) generated a return of 15.1% during the same 12-month period, with 53% of these stock picks outperforming the broader market benchmark. Coincidence? It might happen to be so, but it is unlikely. Our research covering the last 18 years indicates that hedge funds’ stock picks generate superior risk-adjusted returns. That’s why we believe it is wise to check hedge fund activity before you invest your time or your savings on a stock like MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT).
MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 22 hedge funds’ portfolios at the end of the third quarter of 2018. At the end of this article we will also compare MCFT to other stocks including Navigator Holdings Ltd (NYSE:NVGS), Zumiez Inc. (NASDAQ:ZUMZ), and ANI Pharmaceuticals Inc (NASDAQ:ANIP) to get a better sense of its popularity.
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. 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 market by 18 percentage points since May 2014 through December 3, 2018 (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 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to review the fresh hedge fund action regarding MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT).
What does the smart money think about MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT)?
At the end of the third quarter, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, representing no change from one quarter earlier. On the other hand, there were a total of 17 hedge funds with a bullish position in MCFT at the beginning of this year. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, managed by Jim Simons, holds the largest position in MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT). Renaissance Technologies has a $52.7 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Royce & Associates, managed by Chuck Royce, which holds a $19.6 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining members of the smart money that hold long positions include Richard Driehaus’s Driehaus Capital, Israel Englander’s Millennium Management and Noam Gottesman’s GLG Partners.
Due to the fact that MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT) has faced falling interest from the entirety of the hedge funds we track, we can see that there were a few hedgies who sold off their positions entirely in the third quarter. Interestingly, Brian Gaines’s Springhouse Capital Management sold off the largest stake of the “upper crust” of funds watched by Insider Monkey, comprising an estimated $1.8 million in stock. Matthew Hulsizer’s fund, PEAK6 Capital Management, also said goodbye to its stock, about $0.3 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks similar to MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT). These stocks are Navigator Holdings Ltd (NYSE:NVGS), Zumiez Inc. (NASDAQ:ZUMZ), ANI Pharmaceuticals Inc (NASDAQ:ANIP), and Argan, Inc. (NYSE:AGX). This group of stocks’ market caps are closest to MCFT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NVGS | 8 | 309367 | -2 |
| ZUMZ | 17 | 50413 | -1 |
| ANIP | 17 | 59526 | 6 |
| AGX | 17 | 117752 | 0 |
| Average | 14.75 | 134265 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.75 hedge funds with bullish positions and the average amount invested in these stocks was $134 million. That figure was $155 million in MCFT’s case. Zumiez Inc. (NASDAQ:ZUMZ) is the most popular stock in this table. On the other hand Navigator Holdings Ltd (NYSE:NVGS) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks MasterCraft Boat Holdings, Inc. (NASDAQ:MCFT) 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. This article was originally published at Insider Monkey.
