You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
Is MAXIMUS, Inc. (NYSE:MMS) a cheap stock to buy now? Money managers are altogether taking a bullish view. The number of bullish hedge fund bets rose by 1 recently. MMS was in 10 hedge funds’ portfolios at the end of September. There were 9 hedge funds in our database with MMS holdings at the end of the previous quarter. At the end of this article we will also compare MMS to other stocks including Assured Guaranty Ltd. (NYSE:AGO), GrubHub Inc (NYSE:GRUB), and Bruker Corporation (NASDAQ:BRKR) to get a better sense of its popularity.
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With all of this in mind, let’s take a look at the fresh action regarding MAXIMUS, Inc. (NYSE:MMS).
How are hedge funds trading MAXIMUS, Inc. (NYSE:MMS)?
At the end of the third quarter, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from the previous quarter. On the other hand, there were a total of 15 hedge funds with a bullish position in MMS at the beginning of this year. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s elite fund database, Thomas Bancroft’s Makaira Partners has the largest position in MAXIMUS, Inc. (NYSE:MMS), worth close to $7.8 million, amounting to 1.2% of its total 13F portfolio. The second most bullish fund manager is Chuck Royce of Royce & Associates which holds a $5.9 million position. Remaining peers that are bullish contain Cliff Asness’ AQR Capital Management, and Israel Englander’s Millennium Management which is one of the 10 largest hedge funds in the world. We should note that Makaira Partners is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
With a general bullishness amongst the heavyweights, key hedge funds have jumped into MAXIMUS, Inc. (NYSE:MMS) headfirst. Gotham Asset Management created the biggest position in MAXIMUS, Inc. (NYSE:MMS) which had $1.7 million invested in the company at the end of the quarter. Clinton Group also initiated a $0.9 million position during the quarter. The other funds with new positions in the stock are Ken Griffin’s Citadel Investment Group and Paul Tudor Jones’ Tudor Investment Corp.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as MAXIMUS, Inc. (NYSE:MMS) but similarly valued. These stocks are Assured Guaranty Ltd. (NYSE:AGO), GrubHub Inc (NYSE:GRUB), Bruker Corporation (NASDAQ:BRKR), and RPC, Inc. (NYSE:RES). This group of stocks’ market valuations match MMS’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AGO | 32 | 410375 | 0 |
| GRUB | 29 | 1110708 | 4 |
| BRKR | 20 | 293566 | -4 |
| RES | 22 | 317348 | 2 |
As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $533 million. That figure was $25 million in MMS’s case. Assured Guaranty Ltd. (NYSE:AGO) is the most popular stock in this table. On the other hand Bruker Corporation (NASDAQ:BRKR) is the least popular one with only 20 bullish hedge fund positions. Compared to these stocks MAXIMUS, Inc. (NYSE:MMS) is even less popular than BRKR. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
Disclosure: None
