There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other successful funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze MCBC Holdings Inc (NASDAQ:MCFT).
At the end of September, 15 funds from our database held shares of MCBC Holdings. The company saw an increase in hedge fund sentiment during the third quarter, although the level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD), Vishay Precision Group Inc (NYSE:VPG), and Veracyte Inc (NASDAQ:VCYT) to gather more data points.
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We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.
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Keeping this in mind, we’re going to take a gander at the latest action surrounding MCBC Holdings Inc (NASDAQ:MCFT).
How are hedge funds trading MCBC Holdings Inc (NASDAQ:MCFT)?
At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, versus 12 funds at the end of June. Below, you can check out the change in hedge fund sentiment towards MCFT over the last five quarters. So, let’s find out 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, Patrick Halloran’s Wayzata Investment Partners has the largest position in MCBC Holdings Inc (NASDAQ:MCFT), worth close to $58.3 million, comprising 100% of its total 13F portfolio. Sitting at the No. 2 spot is Springhouse Capital Management, led by Brian Gaines, holding a $13.8 million position; 6.8% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors with similar optimism consist of Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital and Chuck Royce’s Royce & Associates. We should note that none of these hedge funds are 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.
Now, key hedge funds have jumped into MCBC Holdings Inc (NASDAQ:MCFT) headfirst. Citadel Investment Group, led by Ken Griffin, created the biggest position in MCBC Holdings Inc (NASDAQ:MCFT). Citadel Investment Group had $5.7 million invested in the company at the end of the quarter. Anand Parekh’s Alyeska Investment Group also made a $2.6 million investment in the stock during the quarter. The following funds were also among the new MCFT investors: John Overdeck and David Siegel’s Two Sigma Advisors, D E Shaw, one of the biggest hedge funds in the world and Benjamin A. Smith’s Laurion Capital Management.
Let’s go over hedge fund activity in other stocks similar to MCBC Holdings Inc (NASDAQ:MCFT). These stocks are Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD), Vishay Precision Group Inc (NYSE:VPG), Veracyte Inc (NASDAQ:VCYT), and Flex Pharma Inc (NASDAQ:FLKS). 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 |
|---|---|---|---|
| GLDD | 11 | 8898 | 1 |
| VPG | 11 | 61990 | 2 |
| VCYT | 8 | 17593 | 1 |
| FLKS | 4 | 1968 | -3 |
As you can see these stocks had an average of nine funds with bullish positions and the average amount invested in these stocks was $23 million. That figure was $100 million in MCFT’s case. Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) is the most popular stock in this table, while Flex Pharma Inc (NASDAQ:FLKS) is the least popular one with only four funds holding shares. Compared to these stocks MCBC 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
